Bank Rakyat denies Sabbaruddin Chik’s claim it agreed to interest-free financing repayment
The Malaysian Insider – 18 hours agoRELATED CONTENT
- Bank Rakyat denies Sabbaruddin Chik’s claim it agreed to interest-free financing …
Bank Rakyat today refuted the allegations by its former chairman Tan Sri Sabbaruddin Chik (pic) that it had agreed to a financing repayment without any interest.
In a brief statement issued by the bank's public relations department, Bank Rakyat said it followed the Islamic financing mechanism, of which the element of interest does not arise.
"However, profit will be charged to any financing issued to customers," the bank said.
"Each financing is a sales and purchase agreement which includes elements of profit and administrative costs such as late payment charges.
"We would like to stress that all of our financing and repayment by our customers include the elements mentioned.
"As far as the bank is concerned there is no repayment and financing that is without profit and administrative charges," Bank Rakyat said in the statement.
The bank also clarified that none of its board members had been terminated.
Bank Rakyat said Sabbaruddin's contract as the bank's chairman expired on April 8, after serving for two terms.
In a report in The Malaysian Insider today, Sabbaruddin had alleged that his tenure was not extended due to a RM40 million loan application made by a person linked to Putrajaya.
Sabbaruddin had told The Malaysian Insider that the individual had used his political connections to settle a loan amounting to RM32 million without any interest calculated.
"The individual who owed the money should not be discussing it with a minister. His debt is with Bank Rakyat, why does he need to see a minister?" the former minister had asked.
Sabbaruddin had revealed that the individual had sought the assistance of Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Hasan Malek.
"When the minister found out, he said 'I can sack all of you'," Sabbaruddin said, referring to Hasan.
Sabbaruddin had told the Bank Rakyat board of directors to initially reject the compromise offered by the individual to settle his outstanding debt.
The individual had offered 120 post-dated cheques to be cashed in by the bank over a 10-year period.
"Ten years to pay off a debt without interest, that means the bank will be the big loser in the end," Sabbaruddin had said.
According to Sabbaruddin, after the decision was made, Hasan was dissatisfied and refused to sign the letter extending his tenure as Bank Rakyat chairman.
"My term ended on April 8 and Bank Negara had agreed to extend my contract, but Hasan refused to sign it," Sabbaruddin had said.
He had also revealed that Hasan had a meeting with the individual without Bank Rakyat's knowledge in January.
"It was only after that we discovered that the two had met, as cheques for January, February and March had been prepared, waiting to be cashed."
The Malaysian Insider understands that the debtor is the owner of a carpet firm in the capital who had sparked controversy in the past.
Sabbaruddin also showed The Malaysian Insider a letter signed by Hasan instructing Bank Rakyat to proceed according to the terms of the compromise, clearly revealing the January meeting.
The incident reached boiling point when Bank Rakyat managing director Mustafa Razak was instructed to raise the issue before the board of directors.
The board was instructed to agree with the method of repayment in March.
Attempts by The Malaysian Insider to contact Hasan failed as he is currently abroad on a working trip.
The same debtor had sparked controversy on the eve of the 13th general election last year when he attempted to file a lawsuit against Putrajaya for violating the terms and conditions of a land deal in Bukit Raja, Selangor. However, the suit was withdrawn the same day.
Soon after, a company owned by the Lembaga Angkatan Tentera Malaysia (LTAT), Boustead Holdings Bhd, announced it was purchasing 80% of shares in the company owned by the debtor, Astacanggih Sdn Bhd.
Boustead Holdings Bhd also bought a piece of land worth RM130 million which was owned by Awan Megah Sdn Bhd, which is owned by Umno Selangor's Senator Datuk Raja Ropiaah Abdullah. – May 26, 2014.
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