Following his sacking, Bank Rakyat ex-chairman Sabbaruddin Chik has revealed a preferential loan given to a VIP at the request of a minister.
On Monday, news portal The Malaysian Insider quoted Sabbaruddin as saying that Domestic Trade, Cooperatives and Consumerism Minister Hasan Malek refused to renew his term as Bank Rakyat Chairman over a shady loan to a VIP linked to Putrajaya.
According to Sabbaruddin, the VIP had used political connections to settle a RM32 million loan without interest. Sabbaruddin was reluctant to accept the borrower’s offer to pay in 120 post-dated cheques to be cashed in by the bank over a 10-year period, as this would not favor the bank.
The VIP then sought help from the minister, who pressured the bank to accept the deal.
“When the minister found out, he said ‘I can sack all of you’,” Sabbaruddin said in relation to the bank’s stand stand on disallowing the profitless loan.
The Malaysian Insider reported that Hasan wrote a letter instructing Bank Rakyat to approve the loan with those terms, a copy of the letter was made available to the news portal. It also reported that Bank Rakyat managing director Mustafa Razak was instructed to raise the issue in the meeting of its Board of Directors.
Bank Rakyat eventually backed down over the Hasan’s insistence and approved the loan. Sabbaruddin questioned why the minister should intervene in a commercial loan between the borrower and the bank. Hasan has denied wrongdoing in the loan, saying that it was done “above board”.
Sabbaruddin, who is ex-UMNO Secretary General, said that the minister was dissatisfied over this matter and opposed the renewal of his term as Bank Rakyat Chairman.
“My term ended on April 8 and Bank Negara had agreed to extend my contract, but Hasan refused to sign it,” he said.
Bank Rakyat has since clarified that it was an Islamic financing mechanism where the element of interest does not arise. However, it did not deny the allegations made by Sabbaruddin.
Sabbaruddin said the bank should explain what method was used where the borrower would end up paying the same amount he borrowed.
Meanwhile, Pakatan Rakyat leaders have raised questions about the deal.
DAP’s MP for Bagan Lim Guan Eng said that Sabbaruddin’s shocking revelations showed “the nexus of patronage, money-dealing and abuse of public monies for cronies of the top leadership.”
“Prime Minister Datuk Seri Najib Tun Razak must respect accountability and transparency by coming clean on the RM 40 million Bank Rakyat loan scandal.
“Failure to do so would only highlight that BN leaders are running the country not for public good but for private benefit of their cronies,” Lim said.
PAS’ Pokok Sena MP Mahfuz Omar said that the preferential loan set a bad precedent for the bank’s corporate governance. He said Putrajaya must answer allegations that the sweetheart deal was given to the businessman because he knew information about government leaders’ confidential dealings.
“We want to know on whose direction was this done and is it intended to silence individuals who have information on scandals involving our country’s leaders,” Mahfuz said.
PKR’s Padang Serai MP N. Surendran and DAP’s Segambut MP Lim Lip Eng, both lawyers by training, called on Bank Negara and MACC to investigate the allegations.
“The MACC should investigate Hasan Malek and take immediate action if it is true that he abused power. This issue shows cronyism within Umno itself,” Surendran said. -The Rocket
