‘Thugs, mafia buying up NPLs’

Thugs are organising syndicated auctions – allegedly with the help of local banks – as a means to launder money, claims a consumer association.

SHAH ALAM: Underworld mafia and thugs have allegedly infiltrated the local banking system.

According to Subang, Shah Alam and Selangor Consumers Association (Cassa), bookies and loan sharks are working in cahoots with financial institutions to take over banks’ non-performing loans (NPLs) and are manipulating the property auctions.

Cassa president Jacob George said “agents” were forming companies and debt-collecting agencies to carry out their activities, and urged the authorities to quickly set up a task force to probe into the matter.

He alleged that these agencies were controlled by the underworld figures, who would offer to take over bank’s NPLs in order to launder illicit monies.

These companies would organise syndicated auctions with banks.

George claimed that one politically connected bank had in fact sold over 43,000 NPLs to debt- collecting agencies while another had traded in 28,000 NPLs.

“Based on our latest study, more than 63% of the victims are alleged to be Bumiputeras,” he told reporters today after lodging a report with the Malaysian Anti-Corruptions Commission (MACC).

He alleged many bank officials, for the sake of self-interest, were willing to reveal privileged information of properties to these thugs.

“These people would then split into four teams, one would bid for one particular property and another would bid another. On paper it might record 20 bidders have attended, but in fact only four people made bids,” he said.

George alleged that in two cases in Penang and Selangor, a successful bidder was found to have set up the company just three weeks ahead of the bid.

“When we investigated the background of the company, together with our police source, we found out that the owners were a bookie, a tobacco smuggler and loan sharks,” he claimed.

He also cited another case whereby the bank auctioned off a property owned by a Bumiputera company, after allegedly increasing the redemption sum from RM13 million to RM15.8 million within two months.

“The successful bidder paid RM15.8 million in cash! This is unheard-of. From where did he get the money?” he asked.

George said he had submitted the evidence to the MACC and is now demanding that the Finance Ministry, Bank Negara, MACC and the police set up a special task force to address the issue.

“We are giving them 21 days to react, failing which we will stage demonstrations outside of banks all over Malaysia,” he said.