Bank Negara caught napping, again?

AT the June 16 hearing of 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), a former administrative manager of the company, David Tan told the Shah Alam High Court that the money paid to the accused and several other politicans had come from the firm’s business partners in Hong Kong.

Tan also said the funds from Hong Kong was channelled into Malaysia through moneychangers in Kuala Lumpur and then passed to him in cash. He kept the cash in the company safe box, and when the time came to deliver the money, he would take out the required amount and put it in a sealed envelope and pass it to Zahid at the latter’s house in Country Heights KL.

These transactions totalled RM43 million and were paid over a period of four years from October 2014 to August 2018.

Tan said he also made payments on behalf of UKSB to Muhyiddin Yassin (RM1.3 million), Khairy Jamaluddin (RM3.7 million), Reezal Merican Naina Merican (RM200,000 to RM300,000). He said he also paid undisclosed amounts to Hishammuddin Hussein, Mohd 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 moneychangers.

It can be calculated that RM48.6 million was funnelled into Malaysia from overseas using the back channel of moneychangers from 2014 to 2018.

Was Bank Negara aware of these transactions? Did the central bank investigate why such a large sums of money were remitted into the country through moneychangers and not through the banking system?

Tan of UKSB said the money came from the company’s business partners in Hong Kong. Do these business partners have businesses in Malaysia that allowed them to send the money to Malaysia?

Did the moneychangers or UKSB declare those sums?

This appears to be the second time Bank Negara has been caught napping.

Bank Negara acknowledges on its website that money laundering and terrorism financing (ML/TF) may affect the stability of Malaysia’s financial system and that 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, which imposes reporting obligations on institutions, was enacted with the intention to fulfil the international standards imposed by the Financial Action Task Force (FATF).

Does Bank Negara practise what it preaches? BNM proudly proclaimed in December 2009 that it had revoked the licences of 41 money changers that were found to be in contravention of the Money-Changing Act 1998.

FATF, in its report entitled “Money Laundering through Money Remittance and Currency Exchange Providers” said that the absence or lax implementation of AML/CFT standards and policies in the operations of money remittance or currency exchange provider provide opportunities that are 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 from Hong Kong?

As for those he named while under oath as being the recipients of the money, it is not enough for them to issue a mere denial.

Yes, there is no limit when it comes to political party funding. Parties are not obliged to disclose the source of the funding.

Each of those named by Tan is a seasoned politician who is fully aware that a large sum of unregulated funding from unknown parties, especially foreign sources, could influence the political process and policy. It can even threaten democracy.

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

If each of them did not receive the money, they should sue Tan and UKSB for tarnishing their good name.

The public is keenly awaiting a response from Bank Negara and the politicians. – June 19, 2022.

* FLK reads The Malaysian Insight.

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