Syndicated loan scam


A SYNDICATED loan scam falsifying payslips for civil servants and employees of government-linked companies (GLCs) allegedly involving the Malaysian National Co-operative Movement (Angkasa) and various individual co-operatives is gaining traction and is currently being investigated.

These also involve loan payouts of only 50% of the amount that was applied for by civil servants with even their ATM cards being confiscated.

The broad scam was first reported in April, where malpractices in giving out loans were said to be taking place in one particular prominent Malaysian cooperative.

The malpractices, however, are said to be widespread and involve other cooperatives. Recent reports have highlighted total losses of RM340mil involving close to 170,000 victims, management fees exceeding 20% to 30% and victims having to pay back twice the amount they had borrowed.

The lure of easy money has rendered many civil servants almost in a state of insolvency. Should these civil servants throw in the towel and declare themselves bankrupt, this would ultimately affect their respective cooperatives, as they would have to take over the loans with the risk of non-performing loans (NPLs) becoming higher.

The scheme allegedly involves Angkasa, which is the apex organisation for cooperatives in Malaysia, and plays an important role in guiding the cooperative movement in the country.

Through the Angkasa Salary Deduction System (SPGA), Angkasa currently manages payroll deduction data amounting to 3,223,109 records with a net payroll deduction of RM1.165bil (2017 figures).

A cooperative loan is a type of credit service from cooperatives or foundations that’s available only to civil servants working in the government and local municipal councils as well as selected government-linked bodies.

Credit co-operatives are registered with the Co-operative Commission of Malaysia (SKM) and regulated under the Co-operative Societies Act 1993.

Co-operatives in Malaysia offer credit facilities by using funds from members or borrowed from other sources. These sources are usually limited, and hence, are also dependent on a steady flow of funds from local financial institutions.

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