Fraudstorytelling | Weekly filmtips | March 24, 2022
Title: How Malaysia’s Banking Scandal Led To the Death of an Auditor
Duration: 7:32
Year: 2021
Producer: VICE
Link: https://lnkd.in/gzPxH-V3
Tagging: #corruption #financialcrisis #realestate #government #financialmarkets
The assassination of Bank Bumiputra Malaysia Berhad (BBMB) senior auditor Jalil Ibrahim shook the world. Prior to 1MDB, one of Malaysia’s biggest financial scandals was the Bank Bumiputra scandal. An elaborate scheme of corruption, false accounting, and sham profits cost the bank $1 billion in public funds. Murder, suicide, and high-level Malaysian government officials were all involved in this story. The Malaysian government eventually provided a bailout worth hundreds of millions of dollars.
Malaysia’s government established Bank Bumiputra Malaysia Berhad (BBMB) in 1965. Petronas (a Malaysian oil and gas company, owned by the government) was paying BBMB 50 million Malaysian ringgit per month to increase their reserves. Therefore, by 1980, BBMB had become Southeast Asia’s second-largest bank. But a significant portion of this money ended up in Hong Kong as loans as a result of the late-1970s property boom. The majority of these loans were received by the Carrian Group. The Carrian Group was founded as a pest control company in the early 1980s by a Singaporean engineer named George Tan. Tan became, later on, Hong Kong’s “corporate golden boy”. But this didn’t last long. Hong Kong was a British colony, and by the 1970s, China desired its return. The intensified deliberations between the British and the Chinese in the 1980s created a sense of political uncertainty and fear among the population, resulting in a huge drop in Hong Kong property prices in 1982. As a result, the Carrian Group suffered, and by 1983, trading in Carrian Group shares had been suspended on the Hong Kong Stock Exchange.
The Carrian Group’s loans could not be repaid. Under normal circumstances, this could have been chalked up as a bad business decision, but not in this case, because it turned out that the money was being lent without proper approval. In December 1982, BBMB officials became suspicious of something fishy and quietly dispatched an auditor to Hong Kong named Jalil Ibrahim for an internal investigation. In this video, VICE will go further into this story, and we will get to see how Bank Bumiputra lost millions in this financial scandal.
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