Probe sought into gold scandal in Malaysia

Probe sought into gold scandal in Malaysia

KUALA LUMPUR (AFP): Opposition leader Lim Kit Siang called
yesterday for a government probe into reports that a Malaysian
minister allegedly received US$10,000 in gold coins from a
Standard Chartered bank unit.

"The Malaysian government should ask for full information from
Standard Chartered to establish whether the allegation is true
and if so, action should be taken against the minister," Lim
said.

The Financial Times in London reported yesterday that Standard
Chartered was investigating the disappearance of $10,000 in gold
coins, allegedly given by its Mocatta bullion unit as a "trade
sample" to a Malaysian minister.

The newspaper did not name the minister.

Senior government officials were not available for comment.

The disappearance of the gold coins has emerged as part of a
wide-ranging probe by the London-based international bank into
allegations that Mocatta executives may have paid commissions to
officials in the Philippines and Malaysia to obtain business,
said the paper.

A banker was quoted by the newspaper as saying that "the
investigation into what happened to the gold is still on. There
may be a perfectly innocent explanation, though it looks very
odd."

Lim said yesterday: "I am very disturbed by the further
allegation in the London press, this time involving an unnamed
minister in the gold bullion scandal."

He was referring to a Feb. 20 article in London's Sunday Times
which alleged links between Malaysian Prime Minister Mahathir
Mohamad and British construction firm Wimpey International.

The article was singled out when Malaysia announced on Feb. 25
a ban on British firms from participating in government contracts
following British media allegations of corruption in Anglo-
Malaysian trade and in Mahathir's administration.

Mahathir had said his government would not lift the ban, which
has cost British firms millions of dollars in lost contracts,
until the British press "stopped spreading lies."

Concern

According to the Financial Times, the Bank of England, which
has been kept closely informed of Standard Chartered's
investigation, is understood to be concerned about the
implications for diplomatic relations between Britain and
Malaysia.

Standard Chartered said on Monday it had uncovered a "small
number of unusual transactions" involving the Far Eastern
operations of its Mocatta subsidiary, as part of its attempt to
improve controls in the group.

It is said to have uncovered "discrepancies in expense
claims", and to have stated that reasons given for the expenses
"included gifts to individuals in certain countries to facilitate
business, a practice contrary to bank rules and procedures."

In Kuala Lumpur, the Malaysian arm of Standard Chartered
declined comment on the Financial Times report.

"We have no further comment. Our press statement (issued
before news reports emerged on the disappearance of the gold
coins) on the issue pertaining to Mocatta still stands," said
Rafidah Abdul Jalil, a spokeswoman for Standard Chartered Bank
Malaysia Bhd.

The statement said: "While the bank's investigation to date
has failed to prove either that any specific gifts were actually
made or that the expenses were genuinely incurred, the bank is
continuing to investigate the position which it treats with the
utmost seriousness."