Pua calls for probe into Bafia breach of over RM60bil

The integrity of financial institutions is at stake, says Petaling Jaya Utara MP Tony Pua, raising alarm over local banks breaching the Banking and Financial Institutions Act 1989 (Bafia) by disposing of non-performing loans (NPL) to foreign companies.

Pua (right) cited a Malay Mail daily report that published evidence of NLPs being bought from local financial institutions with less than 49 percent domestic equity, which is prohibited under Bafia.

In one case, the daily reported, a foreigner, the son-in-law of an unnamed renowned local banker, was involved in the scandal, where the NPLs were sold to agencies with the majority shareholders being foreigners.

The covert practice, ongoing since 2005, said the report has resulted in over RM60 billion in foreign outflow.

"This raises the issue of serious conflict of interest, criminal breach of trust, and even fraud, and must be investigated by the relevant authorities," he said.

The MP also criticised Bank Negara's insipid denial of the report, saying that it was "inaccurate and misleading" despite the show of proof on the breach.