Prime Minister Datuk Seri Najib Tun Razak must respect accountability and transparency by coming clean on the RM 40 million Bank Rakyat loan scandal exposed by former Minister and ex-Bank Rakyat Chairman Tan Sri Sababaruddin Chik. This follows the shocking revelations in “The Malaysian Insider” today of the nexus of patronage, money-dealing and abuse of public monies for cronies of the top leadership, exposed by Sabbaruddin Chik after his tenure was not extended due to a RM40 million loan application made by a VIP linked to Putrajaya.
Sabbaruddin told The Malaysian Insider that the VIP had used his political connections to settle a loan amounting to RM 32 million without any interest calculated due to the intervention of Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Hasan Malek. Sabbaruddin revealed the Bank Rakyat board of directors initially rejected the compromise offered by the VIP to settle his outstanding RM40 million debt by offering 120 post-dated cheques to be cashed in by the bank over a 10-year period.
Ten years to pay off a debt without any interest effectively means getting the money for nothing if the interest rate is pegged at 10% per annum. Naturally the Bank Rakyat Board of Directors was correct in rejecting such a scam of a scandalous offer by the VIP as it would be a loss to the bank and not in the public interest.
Sabbaruddin also showed The Malaysian Insider a letter signed by Hasan instructing Bank Rakyat to proceed according to the terms of the compromise offered by the VIP. Following the Board of Directors’ refusal, Hasan was dissatisfied and refused to sign the letter extending Sabbarudin’s tenure as Bank Rakyat chairman, which ended on 8 April, even though Bank Negara had agreed to extend Sabbaruddin’s contract.
Datuk Seri Najib should explain to the public this expose by Sabbaruddin because the VIP concerned is closely related to BN leaders, reaching right up to the inner sanctums of power in Putrajaya. Secondly, Najib should explain what was the basis of Bank Rakyat giving out these loan. Was it purely political or were proper procedures and due diligence was complied with when Bank Rakyat issued the RM40 million loan to the VIP – how a large RM40 million loan can be given to a VIP without any financial standing or repayment ability?
Thirdly, Najib should also explain what happened to the compromise offer by the VIP after Sabbaruddin’s tenure as Bank Rakyat Chairman was not extended. Was the VIP allowed to repay back the loan in 120 equal instalments over 10 years, interest-free? Finally, Najib should also come clean and fully account for any other similar sweetheart deals of giving mega-loans to VIPs of dubious financial standing.
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. Further it would also question Bank Negara’s credibility and integrity in ensuring a sound and reliable financial system when loans are given out solely based on political patronage and pay-offs.