25.30.015
Restatement of Kacta
DE: CXX/007/MEG/JPB
The criminal charges against Kr Rais SANIMAN relate to transactions between the Hong Kong Bank Bumiputra Malaysia Finance Limited ("BMFL") and its directors, on the one hand, and Mr George TAX and companies controlled by him on the other hand (the "CARRIAN Group"). Between December 1979 and October 1983, MIFL. advanced hundreds of millions of US dollars to the CARRIAN Group as well as large suns of Hong Kong dollars and pounds sterling. The CARRIAN Group collapsed in late 1983 owing its creditors over one thousand willion US dollars. With the possible exception of the collapse of B.C.C.I., no other corporate insolvency has achieved such notoriety in the financial world. EXFL's losses from loans made to the CARRIAN Group were approximately US$ 800 million.
Mr SANINAN was a Senior Manager of the International Banking Division of BMPL'{ parent bank, Bank Bumiputra Malaysia Berhad ("BBI0"), and an alternate Director of BMFL in Hong Kong. Within BMFL, Mr SANIMAN shared his authority with two other directors, Mr Lorrain Esse OSMAN and Mr Dato Hashis SHAMSUDIN: the former was a founder director of BBMB and chairman of the board of BMFL, the latter vas an executive director of BEMB and a director of BMFL.
BBNB is the largest commercial bank in Malaysia.
Mr SANIKAN had a specific position as compared to Messrs OSMAN and SHAMSUDIN : be was at the same time Senior General Manager of the International Banking Division, Senior Officer of the Funds Management Department of such division and member of the Management Committee of BEMB. He had therefore overall responsability and control over the reports,
the Committee,
the international banking operations of BBMB and its subsidiary BNFL. He regularly travelled to Hong Kong to attend the affairs of BMFL and regularly sat at MEL's board meetings. He was the only one BMFL's Directors to maintain a private residence in Hong Kong.
He was, therefore, in a unique position firstly to procure that B2B advance large sums of money to BHFL, then to have approved the loans sade by BNFL from such advances.
The advances nada to the CARRIAN Group at the initiative of Mr SANINAN were of course in violation of applicable banking regulations and practices and without regard to possibilities of repayment, evaluation of credit risk, guaranties etc... But, more importantly, Mr BANIMAN and the other directors of DMFL together with Mr TAN engaged in fraudulent manoeuvres to procure the payment of the funds and conceal the exact nature of the advances, of their taras and of the borrowers by seans, in particular, of forged correspondence and loan documentation and of fictitious companies used only as vehicles for channelling the funds by creating the false appearance of a multiplicity of unrelated borrowers (although 80% of BMFL's total loan portfolio was extented to the the CARRIAN Group).
Fraudulent manoeuvres and forged documents were also used to conceal the actual purposes of the advances from the regulatory authorities (the Banking Commissionner : the advances were falsely reported as deposits with other banka or inter-bank loans, inter-bank money market loans, syndicated loans etc...