Heated debate on offshore loans

Dato Sri Wong Soon Koh

SECOND Finance Minister Dato Sri Wong Soon Koh and Chong Chieng Jen (DAP-Kota Sentosa) engaged in a debate lasting nearly 15 minutes on two offshore loans in pursuance to the Loans and Loan Guarantees Ordinance, 1999 in the august House yesterday.

Wong said all loans and loan guarantees had been laid on the table while all details of the agreement on borrowings by the state government had been tabled in the State Legislative Assembly (DUN) accordingly.

“In respect to the two offshore loans that were obtained by special purpose vehicle as mentioned by Kota Sentosa, the details of these loans have been disclosed accordingly in the audited financial statements of the Government Contributions Towards the Approved Agencies Trust Fund.

“The financial statements of the trust fund were duly audited by the Auditor General (AG) Malaysia on an annual basis and duly certified. And these two offshore loans are not guaranteed by the state government,” he said before concluding his winding up speech.

Chong immediately sought a point of clarification by pointing out that the state government had approved approximately RM1 billion to cover the loans for the fund to be allocated into the trust fund called Government Contributions Towards Approved Agencies Trust Fund.

“Isn’t that guarantee by the government? As mentioned by the Honorable Minister that the audited reports of this Government Contributions Towards Approved Agencies Trust Fund, those reports audited by the AG were not tabled in this House,” he claimed.

He added that what had been tabled in the DUN sitting was a one-page report which contained “amount brought forward, amount entered, amount out and amount carried forward”.

He described the report as “ridiculous, simplified, insufficient and non-transparent”.

“Can we have the government table the fully audited financial reports in respect of the trust fund? In the report tabled last week, there is a clear indication as to where the money will be utilised. Why is it that the offshore loans to Equisar and SSG that amounted to US$1.6 billion were not included in the report which includes loan guarantees?

“Honourable Minister, I believe in the prospectus for the issuance of the bond by Equisar, it was stated very clearly that the state government undertakes to provide sufficient fund for the trust accounts for the repayment of the bond issued to Equisar. Isn’t that a guarantee?” he asked.

Wong responded by telling the august House that the DAP leader had insinuated the state government would like to circumvent the scrutiny of the DUN on its expenditure or to avoid the scrutiny of the Malaysian Security Commission.

Chong Chieng Jen speaking during the DUN session.

“Is that right?” he directed at Chong.

In his defence, Chong said, “I don’t want to insinuate any bad intent. But the fact is that he (Wong) had failed to table the accounts in this House.”

Wong assured the august House that “we do have provision to appropriate funds” to ensure that the state had sufficient funds to meet its commitments.

“It does not mean the state government has to guarantee, no. We merely provide enough fund to meet our commitment. I’d like to say that we manage our financial funds through proper procedures and financial compliance, the comprehensive and thorough disclosure and document presented before the assembly.

“The state government all the time has complied with all the relevant laws and regulations pertaining to financial management and conducted our financial affairs in a transparent and accountable manner.

“In other words, we will always be conscious of our responsibility and public accountability and I’d like to assure Kota Sentosa that we have all the financial discipline and prudence in utilising public funds,” added Wong.

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