Khamis, Disember 20, 2012


Explaining the NPL mess

2007 exemption triggered problem, says crusading lawyer


NPL CRUSADER: Thomas, who did not want to be photographed for security reasons, speaks to our reporter — Pic: FIRDAUS LATIF

19/12/2012: HOW did thousands of Malaysians lose their homes over breaches in the Banking and Financial Institutions Act 1989 (Bafia) and have non-performing loans (NPL) sold off to foreign-owned debt collection agencies?

The Malay Mail spoke to crusading lawyer Jennifer Thomas, who has been at the forefront of the war against the banks and debt collection agencies, protecting the interests of the victimised.

The paper had reported on Monday that a key witness in an NPL case was found dead, two weeks before he was due in court.

Thomas said the root of judgments favouring debt collection agencies and banks stemmed from the confusion over an exemption order gazetted by then second finance minister Tan Sri Nor Mohamed Yakcop on May 10, 2007.

"The NPL is governed by Section 49 and Section 50 of Bafia.

While debt collection agencies and banks get the vesting order via Section 50, Section 49 states that banks can only sell NPLs to financial institutions licensed by the Finance Ministry," she said.

"On May 8, 2007, the second finance minister made the exemption order for Section 49(9)(A) and it was gazetted on May 10, 2007.

This all-important PU(A)184/2007 triggered the problem."However, once the minister made the exemption under Bafia, he should have invoked Section 118(4), whereby the exemption must be tabled in Parliament soon after the gazette. It was never tabled.

"The banks and collection agencies are manipulating the courts, using the gazette as proof that it was tabled in Parliament.

"The exemption read: "The minister exempts a licensed institution from the application of paragraph 49(9)(A) of the Act in relation to the disposal of non-performing loans by a licensed institution to an institution not licensed under the Act provided that such disposal is made in accordance with the requirements set out in the guidelines.

"The exemption order nullified section 49(9)(A) of the Bafia, allowing banks to dispose of their NPLs to non-licensed financial institutions.

Thomas said that unless an amendment had been approved by Parliament, any exemptions that had been gazetted could not become law.

Breach of Section 49(7) of Bafia will cost the offending party RM5 million in fine, a jail sentence of five years, and a daily fine of RM 5,000 for each breach.

She said the debt collection agencies' legal representatives were also claiming a ministerial sanction by Prime Minister Datuk Seri Najib Razak in his role as the finance minister dated Sept 7, 2009.

"This is another paper shield they are using. How-ever, Najib did not give a blanket approval in 2009.

The letter states that there was a blanket approval on July 6, 2007. Where is the so-called blanket approval? I've never seen it," she said.

"When I asked Bank Negara, they say the letter is confidential." Thomas said there was no provision under Bafia allowing for blanket approvals in the first place.

WEDNESDAY, DECEMBER 19, 2012 - 15:35

by Azril Annuar

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