MP SPEAKS The failure of SRC International Sdn Bhd (SRC), a wholly-owned Finance Ministry subsidiary, to submit its annual accounts on a timely basis – despite a RM4 billion loan from the Retirement Fund (Incorporated) guaranteed by the federal government – smells of fishy business.

SRC is an anonymous-sounding company owned by the Finance Ministry but a peek into its short history and balance sheet raises plenty of question marks.

SRC secured a RM4 billion Islamic loan from the Retirement Fund, which has been guaranteed by the federal government.

The loan bears a profit rate of 4.65 percent for the first three years and a profit rate equivalent to the Malaysian Government Securities' profit rate, plus 0.7 percent, for the remaining tenure.

The loan was disbursed in two tranches in August 2011 and March 2012.

Despite the size of the loan and entity, the financial accounts of SRC was last filed for the year ending March 2012.  

No reason for delay

The accounts for March 2013 which were due by September 2013 have not been submitted.

The question is, why is it so difficult for a company with hardly any activity, other than the mega loan it took, to submit its financial statements to the authorities?  

I had asked this question in Parliament and received a response from the finance minister on Oct 14.

There was no reason given for the delay, other than to say that the financial statements for both March 2013 and 2014 will be submitted before the end of October.

What was more curious in the answer provided was that the finance minister could not be remotely specific about what business SRC is involved in.

All he could describe was: " SRC International Sdn Bhd (SRC) merupakan salah sebuah syarikat yang ditubuhkan untuk mengendalikan beberapa projek Strategik Infrastruktur Negara…

SRC dikendalikan sebagai sebuah syarikat strategik berpandangan jauh yang akan mengimplimentasi projek-projek strategik infrastruktur yang akan melipat gandakan keupayaan negara dalam menjana pertumbuhan jangka-panjang yang berkekalan.

(SRC International Sdn Bhd (SRC) is a company set up to execute several National Strategic Infrastructure programmes... SRC is set up as a company with long-term strategic objectives that will inplement strategic infrastructure programmes that will multiply the country's ability to generate sustainable long-term growth.)

The long-winded description will leave readers scratching their heads as what is so secretive about SRC.

Suspicious takeover

More suspiciously, SRC was hastily acquired from 1Malaysia Development Bhd (1MDB) before the end of March 2012, after the RM2 billion tranch was fully disbursed.

Hence the question is: Why did 1MDB raise the RM4 billion government-guaranteed loan via SRC, and then, why did the Finance Ministry take over SRC so soon after the RM2 billion loan was fully disbursed?  

I had asked the Finance Minister but received no reply to this query in his answer.

Without transparent answers from the government, and given the suspicious circumstances, we can only speculate that there may have been some serious financial breach or misappropriation of the RM4 billion loan to SRC, which cannot be reflected in the consolidated accounts of 1MDB.

This could also have caused the delays in the submission of 1MDB’s March 2013 accounts, as well as the resignation of 1MDB’s auditors then, KPMG Malaysia.  

To resolve this conundrum, the Finance Ministry “acquired” SRC so that problems in that company will not be reflected in 1MDB’s books.  

However, as the problems remain, SRC was unable to submit its financial accounts since March 2012.

Jose Barrock has reported on portal fz.com in May this year that the March 2012 accounts showed that SRC had invested RM2 billion in a unit trust investment managed by AmInvestment Services Bhd, which paid a dividend income of less than 0.01 percent and another RM1.7 billion in short-term deposits.

The multi-billion ringgit question is what has happened to the RM4 billion since March 2012? Najib Abdul Razak, who is both the finance and prime minister, as well as 1MDB chairperson, must answer this question.

The sheer lack of governance, transparency and accountability from the wholly-owned government corporation chaired by the Prime Minister Najib Abdul Razak himself is both shocking and disgraceful.

Such scandalous behaviour certainly serves as a terrible example to all other government agencies.

TONY PUA is the MP for Petaling Jaya Utara and DAP national publicity secretary.

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