LETTER | Bank Negara caught sleeping again?

LETTER | At the June 16, 2022, hearing for the trial of Ahmad Zahid Hamidi who is facing 33 charges of receiving bribes amounting to approximately RM43 million from Ultra Kirana Sdn Bhd (UKSB) over four years from 2014 to 2018, a former UKSB administrative manager, David Tan, told the High Court in Shah Alam that the monies came from their business partners in Hong Kong and not UKSB.

He also said, "the funds from Hong Kong would be channelled into Malaysia through money changers in Kuala Lumpur, and then passed on to him in cash. After receiving the cash, he would keep it in the company safe box first, and when the time came for them to make the delivery, he would then take out the required amount and put it in a sealed envelope and pass it to Zahid at his house in Country Heights KL."

These transactions, totalling approximately RM43 million, were paid, in cash, over a period of four years, from October 2014 to August 2018.

Tan also claimed that he made payments on behalf of UKSB to Muhyiddin Yassin totaling RM1.3 million, Khairy Jamaluddin for a sum of RM3.7 million, Reezal Merican Naina Merican for a sum between RM200,000 to RM300,000 while no amount was disclosed for his claim of payment to Hishammuddin Hussein, Shafie Apdal and Anifah Aman.

It is presumed that the payments to Muhyiddin, Khairy and Reezal were also from funds channelled into Malaysia from Hong Kong through money changers.

Assuming so, a total sum of approximately RM48.6 million was channelled into Malaysia from overseas using the back channel of money changers from Hong Kong during the period from 2014 to 2018.

Was Bank Negara aware of all these monies channelled into the country via money changers?

Did it not raise any suspicion for Bank Negara to investigate why such large sums of monies were remitted into the country through money changers and not through the banking system?

Tan said the monies came from their business partners in Hong Kong and not UKSB. Do these business partners have businesses in Malaysia to warrant them to transmit the monies into Malaysia?

Did the money changers or UKSB even report or seek official clearance for bringing in such a large sum of money into the country?

‘Lax standards’

This appears to be the second time Bank Negara was caught flat-footed, not knowing monies being remitted into the country, not small sums but large quantities in millions and billions, and the purpose of such remittance into the country.

As stated on its own website, Bank Negara states and acknowledged that money laundering and terrorism financing (ML/TF) might affect the stability of Malaysia’s financial system and socio-economy and criminal networks, money launderers, and terrorist financiers are highly adaptive and quick to exploit any weak links within an increasingly borderless world to obscure detection of such illicit funds.

The Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA), which imposes reporting obligations on reporting institutions as a counter-measure to prevent or mitigate ML/TF, was enacted with the intention to fulfil the international standards imposed by the Financial Action Task Force (FATF).

Does Bank Negara really adhere to what it states in the above statement? BNM has, on its website, proudly proclaimed in a statement dated Dec 9, 2009, that it has revoked 41 money-changing licences in 2009 that were found to be in contravention of various provisions of the Money-Changing Act 1998 (Act).

FATF, in their report titled `Money Laundering through Money Remittance and Currency Exchange Providers’, admitted that the absence or lax implementation of AML/CFT standards and adequate related policies in the operations of money remittance or currency exchange providers had provided opportunities that were exploited by money launderers and other criminals.

Did Tan or UKSB make the necessary declaration in Customs Form 22 (Borang Kastam 22) under the Currency Exchange Control Act 1953 and the Customs Act 1967 for the RM45 million that was remitted and received by him from Hong Kong?

As for the payment of large sums of money to the above-named politicians, issuing a bare denial claiming you don’t know Tan or UKSB and you are prepared to be investigated does not absolve any of you.

Yes, when it comes to political party funding, there is no limit, and parties are not obliged to disclose the source of the funding, which makes political donations a vague subject but still entirely legal in the country.

Those named by Tan are seasoned politicians who are fully and well aware that unregulated large amounts of funding coming from unknown, and especially foreign sources, could influence the political process in negative ways, such as “vote-buying” and in influencing policy decisions. It can even threaten the democratic process and values.

Unless Tan pocketed the monies himself but informed his bosses, Harry Lee Vui Khiun and Wan Quoris Shah Wan Abdul Ghani, that monies were paid as political donations to those named politicians, there are no valid reasons why he would fabricate and claimed that monies was paid and concurrently smear the names of these politicians.

As Tan said in court, he was worried about the ledger, in which he kept the names of all those he paid off, falling into the wrong hands and as such, he recorded all these payments using code names that only he understood and knew. If he made up these names for the purpose of deceiving his bosses, he would have included the names of other prominent politicians too, but he did not.

If Khairy, Reezal Merican, Hishammuddin, Shafie and Anifah did receive monies from UKSB or Tan, the public is keen to know the purpose and reason for the political donation.

The public goes by the adage – there is no free lunch. What was the quid pro quo that each of you rendered to UKSB?

If you did not receive any such payments and this is a smear campaign to tarnish and destroy your respective reputation and integrity, issuing a bare denial and saying you will cooperate with any investigation by the authorities is not sufficient in the eyes of the public.

Each of you should initiate legal action and file a report against Tan and UKSB if what he said in the High Court, under oath, if it is false is perjury.

The public is watching keenly on the response from Bank Negara and the individual politicians named to have received monies as political donations from Tan and UKSB.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.