Investigate Bank Rakyat!

Posted: 27 May 2014 02:55 AM PDT

I believe there is an urge for Bank Negara and the MACC to investigate Tan Sri Sabbaruddin Chik's (pic) allegation that a minister had used his authority to ask Bank Rakyat waive the interest on a RM40 million loan given to a carpet businessman.

The former Bank Rakyat's chairman who claimed 'being removed due to the interest-free loan' episode also rebutted the bank's statement today that denied approving the outstanding balance of RM32 million be settled without interest.

So, which is which now?

The Malaysian Insider has the story:
Former Bank Rakyat chairman Tan Sri Sabbaruddin Chik today rebutted the bank's denial that it had agreed to a financing repayment on a RM32 million loan to businessman Deepak Jaikishan without any interest.
He reiterated that the bank's board of directors had initially rejected the easy repayment option proposed by the Deepak, but had to give in due to the interference of a minister in the matter.
"I just want to clarify that the one who rejected the suggestion was not me, the entire board rejected it," Sabbaruddin told The Malaysian Insider.
The Malaysian Insider yesterday reported that a VIP had used political connections to settle a loan amounting to RM32 million without any interest due to the intervention of Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Hasan Malek.
The board of directors had initially rejected the compromise offered by the individual to settle his outstanding debt.
Following Sabbaruddin's allegations, Bank Rakyat in a statement yesterday said that the element of interest did not arise in the Islamic financing mechanism.
"Each financing is a sales and purchase agreement which includes elements of profit and administrative costs such as late payment charges.
"As far as the bank is concerned there is no repayment and financing that is without profit and administrative charges," the bank said.
The bank, however, did not refute Sabbaruddin's allegations.
Sabbaruddin explained today that the board of directors had met to discuss the unpaid debt by Deepak and in the meeting, the board members unanimously voted against the easy exit proposed by the individual.
"Bank Rakyat must explain what method was used where the borrower would end up paying the same amount he borrowed," he said.
According to Sabbaruddin, Deepak had offered 120 post-dated cheques to be cashed in by the bank over a 10-year period.
"Ten years to pay off a debt without interest, that means the bank will be the big loser in the end," Sabbaruddin said previously.
Sabbaruddin yesterday spilled the beans on cronyism and abuse of high office in Putrajaya by revealing that his tenure was not extended due to a RM40 million loan application made by a person linked to Putrajaya.
He said the individual had used his political connections to settle a loan amounting to RM32 million without any interest calculated.


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