MICRO-CREDIT trust Amanah Ikhtiar Malaysia, a fund to help poor Bumiputera, is dying a slow death due to unresolved scandals, said its employees.

They said its closure would be unsurprising given the allegations of power abuse, lack of transparency, and poor investment decisions that are said to have racked up a RM600 million debt for the federal government.

Since 2018, there have been calls for a probe into Amanah Ikhtiar but none was launched. Instead, it appears talks are ongoing to corporatise the private trust which will allow it to do business, according to news reports.

Its employees are worried Amanah Ikhtiar’s situation is affecting borrowers, who are facing Covid-induced hardship.

“All this time, they have relied on Amanah Ikhtiar to help their businesses.  Amanah Ikhtiar has been established for a long time and its success in helping entrepreneurs has been proven.

“Three generations have benefited from Amanah Ikhtiar.

“But  the organisation is in a bad financial situation. We are worried it will be closed if the government can no longer afford to inject funds,” said a former staff member who asked not to be named.

The 40-year-old woman said she resigned because of the way the management was running the trust. She did not want the date of her resignation to be known, fearing that the information would be a clue to her identity.

The fund has deviated rom its original purpose as well as violated its trust deed, such as by paying bonuses to the board members, she said.

The former worker said this happened after certain individuals took over the management and appointed cronies to board positions.

“There was conflict of interest in some appointments. For instance, the deputy chairman of the trust would also be chairman of a cooperative.

“As deputy chairman he would already receive a large remuneration. Add to that the remuneration for his cooperative position and the person would be receiving a salary in the range of RM40,000 to RM50,000,” she said

Amanah Ikhtiar, founded in 1987 to assist the poor with micro-loans, is not a profit-driven entity, she said.

“Yet the leaders are paid RM40,000 to RM50,000 a month, do not exercise their management responsibilities, and abuse their power by bringing in their friends for loans.”

The former worker also said Amanah Ikhtiar was run by unethical people, such as a director who is facing graft charges in court.

She mentioned the case of Mohd Farid Mohamad Ali, who was charged in June with making false claims to supply RM1.5 million worth of cooking oil to retail companies.

She said the trust’s funds had been used for political programmes, including in Batu Pahat, Johor.

Previous investigations by the Malaysian Anti -Corruption Commission (MACC) into Amanah Ikhtiar were short-lived and inconclusive, with no action taken, she added.

Tasik Gelugor MP Shahbudin Yahaya is the chairman of the board and his deputy is Mohd Najib Mohd Noor.

Shabudin had not responded to The Malaysian Insight’s request for comment at the time of writing.

During Pakatan Harapan’s time in government in 2018, then deputy minister in the Prime Minister’s Department Hanipa Maidin had wanted to deregister Amanah Ikhtiar by revoking its certificate of incorporation under the Trustees (Incorporation) Act 1952.

He said the organisatio had violated the law by setting up subsidiary companies and failing to publish its financial reports.

Earlier this year, it was reported that the government was planning to privatise Amanah Ikhtiar, failing which it could be taken over by the government with RM857.97 million in federal loans.

The chairman at the time, the late Lajim Ukin, had denied the reports, saying the fund could instead be corporatised.

Amanah Ikhtiar has also been red-flagged by the Malaysian Trades Union Congress for failing to remit fees amounting to RM140,000, collected over a 10-month period from its workers, to the Amanah Ikhtiar Malaysia Employees Union of Peninsular Malaysia.

Since its inception, Amanah Ikhtiar has extended micro-credit loans to 3.75 million recipients.

But branches are closing, said another worker who did not want to be named.

He said this included branches in Lanas, Kelantan and Shah Bandar, Terengganu. There is only one branch left in Sarawak.

“Ten out of 130 branches have closed and that is strange because during the Covid-19 pandemic, there are more people who need help,” he said.

“They say these branches are not competitive but how can that be when there are more people needing financial help?

“The truth is, Amanah Ikhtiar has no money. It depends on the government. The government must intervene and thoroughly investigate.” – November 28, 2021.