Bank Negara should give a full report on the extent of mismanagement, abuses of power and criminal breach of trust resulting in Danaharta having to take over RM40 billion of NPLs (non-performing loans) in the financial system.
The Malaysian public are entitled to know what percentage of the NPLs are caused by extraneous factors beyond the control of the financial system, in particular the currency crisis, and what percentage of the NPLs are the result of unsound transactions because of mismanagement, abuses of power and criminal breach of trust.
Public confidence in Bank Negara’s forced merger plan cannot be enhanced if the central bank is seen to be reluctant to clean up the banking system and even condoning mismanagement, abuses of power and criminal breach of trust resulting in tens of billions of ringgit of NPLs in the financial system.
Bank Bumiputra, which had to be bailed out three times in 12 years to the tune of RM4.7 billion is the worst example of such lack of accountability, as not a single person had been brought to court for colossal financial losses which were finally borne by the taxpayers.
Other countries have allowed the glare of publicity to expose the mismanagement
of their banks. In Thailand for instance, the report
of Price Waterhouse Coopers commissioned to examine the non-performing
loans of the state-run Krung Thai Bank was made public earlier this month.
In its review of loan portfolios of 240 groups of debtors, it revealed
gross mismanagement, such as:
The first question is whether Bank Negara had commissioned an examination of all the 2,000 non-peforming loan accounts by professional accountants and auditors.
In a statement on August 10, 1999, Bank Negara Governor Tan Sri Ali Abul Hassan bin Sulaiman said that it has cost the Government about RM60 billion in bailing out the financial institutions.
DAP calls for greater accountability and transparency in the financial sector with Bank Negara taking the first step by issuing a public report on investigations into non-performing loans in the financial sector on the extent of of NPLs in the financial system caused by mismanagement, abuses of power and criminal breach of trust.