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."