Soon Koh
KUCHING (Nov 16): Dato Sri Wong Soon Koh is awaiting “clear answers” from Second Finance Minister Datuk Amar Douglas Uggah Embas with regards to his queries on the Development Bank of Sarawak (DBoS).
The Parti Sarawak Bersatu (PSB) president says it goes without saying that any development banks such as DBoS must comply with the stringent Bank Negara Malaysia’s (BNM) guidelines.
“It is a known fact that the overwhelming amount of deposit collected by DBoS comes from the State Reserves. The placement from government statutory bodies, local authorities, and state government controlled companies is very minimal,” he said in a statement today.
Wong said the deputy chief minister should reveal how much of the State Reserve Fund had so far gone into DBoS, how much of the fund deposited with DBoS from the State Reserve had been expanded for loans by DBoS, and how much of the deposit placements from the Reserve were still held by DBoS.
As pointed out, he said DBoS had conducted lending activities like any other bank.
“DBoS manages its deposits and placements like any other financial institution, but we must know that, the only source of deposit placement with DBoS comes from government coffers.
“DBoS is not allowed to collect or accept any deposits from any other sources. DBoS’ fund comes solely from the state coffers,” said the Bawang Assan assemblyman.
Wong asserted that DBoS was not a separate entity from the state government.
Given this, he said any fund expanded by DBoS were funds from the State Reserve.
Any loans or any bond issued by DBoS could become a liability of the state government as DBoS was solely owned by the state government, he added.
“In truth and in fact, State Reserve placed with DBoS and spent on projects is the same as spending the reserves until such time when all the loans so lent out are fully recovered.”
Wong said PSB did not doubt the ability of those who are managing DBoS and they had complete trust and confidence in the ability of the State Financial Secretary in discharging financial duties and responsibilities.
Despite having said that, he opined that the state government should not over commit itself to too many development projects and rely too much on Alternative Funding.
“If we over commit ourselves to too many multi-billion projects, rely too much on Alternative Funding, we may tap too much into our reserves, to affect the confidence of the global investors in the economic fundamentals of our state.
“We must know that our reserves are our rainy day fund, painstakingly built up over the past 20 years or so, and therefore must be guarded zealously to enable us to navigate the challenges ahead of us,” added Wong, who was second finance minister from July 2004 to July 15 last year.