#i need a loan now
‘RM500 million loan’ merits new probe into DEIG, says Selangor BN rep The Malaysian Insider Tuesday, 17 November, 2015
There is enough reason for another probe into the Selangor government’s contentious Darul Ehsan Investment Group (DEIG), says a Barisan Nasional (BN) member of JP-ABAS, the state assembly’s select committee overseeing government-linked companies.
This is since recent developments, including DEIG’s rumoured application for a RM500 million loan, conflicted with the Selangor administration’s assurances that the state investment firm was not fully operational, said Shahrum Mohd Sharif.
“I will bring it up in the next JP-ABAS meeting and propose that we have another hearing,” said Shahrum, who is also Dengkil assemblyman.
He said another hearing was now necessary as DEIG officials did not disclose at a meeting in July that the company was applying for a loan.
JP-ABAS held a closed hearing with DEIG’s top officials in July, seeking answers to why the company was set up, its structure and whether there were enough mechanisms to ensure it operated transparently and with accountability
“Menteri Besar Mohamed Azmin Ali said DEIG would only be fully operational next year.
“But now we find out that they are already asking for such a huge loan to start business and we worry that their business model is not sustainable,” said Shahrum, who is the sole BN member on the seven-man select committee.
Shahrum said he learnt that subsidiaries under the DEIG have also changed their names, signalling the company was becoming fully operational.
The state government’s investment firm has raised eyebrows from PKR’s ally in the administration, DAP, which questioned the lack of accountability in managing investments.
DEIG’s stated objective is to strengthen state assets and restructure all government-linked companies under the current investment arm, Menteri Besar Incorporated (MBI).
But its questionable governance structure with a lack of accounting to the state legislature led to claims that it was a scandal in the making along the lines of the federal government’s 1Malaysia Development Bhd (1MDB), which Azmin denied.
Another JP-ABAS member, Lau Weng San from DAP said he was open to the idea of another hearing provided that there was new, solid information on the company.
“We only have a hearing when it is necessary. At the moment, we don’t have any new information on the company. But if anyone does have anything they are welcome to share it with us.”
The committee will meet after the current assembly sitting to determine whether another hearing is necessary.
White paper can boost credibility
A July JP-ABAS statement on DEIG said that it was a private entity established in December 2014 to manage strategic investments, and also rationalise and restructure all subsidiaries under MBI.
DEIG would be fully owned by MBI, while its board of directors would comprise the menteri besar, state secretary, state financial officer and MBI’s chief executive officer and chief operating officer.
MBI has assets of between RM20 billion and RM30 billion and owns about 5,000ha of land throughout Selangor.
In July, JP-ABAS questioned the need to set up DEIG as MBI’s subsidiaries could be restructured without it.
Among the committee’s other findings were that the DEIG had not put in place a robust system for good governance and accountability.
The company also did not have a solid and transparent system to ensure that any joint ventures it carried out would be fair and equitable to Selangor.
JP-ABAS urged the Selangor administration to table a white paper in the assembly to explain DEIG’s operations and justify its necessity.
On October 30, Azmin told the assembly the company was not yet operational and would only start once its governance structure has been set.
Azmin said DEIG would reduce the state’s dependency on taxes and would instead allow the state to reap more dividends from MBI’s assets.
Although he did state whether a white paper would be tabled, Azmin said he was open to the assembly’s influential select committee of competency, accountability and transparency (Selcat) probing into it.
DEIG chief operating officer Soffan Affendi Aminuddin told the media on November 5 that the company did not take the RM500 million bank loan.
JP-ABAS chairman Saari Sungib said it was not compulsory for the administration to table a white paper but that it would help dispel much of the criticism towards DEIG.
“Just like there was white paper on restructuring the water industry, there should be one on DEIG. It is a powerful body and we want to ensure it is accountable and has enough check and balance.
“DEIG is going to be an effective instrument for swift decision-making as well as a powerful body. Thus we want to ensure it has a high standard of check and balance and accountability”. – November 17, 2015.