Negri MB’s RM10m tip of hot money iceberg

Money changers say however that authorities should not focus on the hawala system but rather on why some politicians have access to so much money and moving it abroad.

By Lee Wei Lian, The Malaysian Insider

When aides to the Negri Sembilan mentri besar sent RM10 million to London via a money changer recently, they were just following in the footsteps of many who have sought the hawala system to move ill-gotten gains and wealth to more secure locations.

Apart from flouting exchange laws and possibly the Anti-Money Laundering Act, the trail of money outside the country betrays a lack of confidence in the future of Malaysia as they are basically transferring funds outside the country through underground channels.

The Malaysian Insider understands that Bank Negara Malaysia (BNM) is unlikely to charge any of them because the list contains a number of prominent Malaysians, including top businessmen, chiefs of some government-linked companies (GLCs), politicians and several ordinary people either sending money for their children’s needs abroad or just plain distrustful of Malaysia’s future.

And the list is too long as BNM has discovered that these well-heeled tycoons, cutting across all racial lines, and the rest have been using the network of Indian-Muslim money changers across the world to remit millions of ringgit every month to offshore accounts.

The only thing BNM has done is to cancel the licences of the money changers, with some 40 licences taken back this year.

The case came out in the open when Batu MP Chua Tian Chang revealed that Negri Sembilan MB Datuk Seri Mohamad Hasan had used Salamath Ali money changers in KLCC Suria to send RM10 million to London. The money changer lost its licence and its shoplot is now closed, ostensibly for renovations.

Several Indian-Muslim money changers and opposition leaders say Mohamad’s transfer is just one of many transacted daily to move millions of ringgit to “safe havens” abroad, potentially depriving the nation of capital and breaking local laws in the process.

Chua, who is also PKR strategy chief, told The Malaysian Insider he has access to a list of high-profile personalities who used the money changer transfer services, also known as hawala as practised in India.

He claimed among them is a senior minister’s wife who allegedly had money transferred to her overseas and a major GLC chief who apparently moved £3.2 million (RM18 million) worth of funds to London.

But Chua said that he will not reveal the names until he is “absolutely sure”.

“This is only the tip of the iceberg,” Chua said. “Millions of dollars are going out and I think it is affecting the economy.”

Money changers say however that authorities should not focus on the hawala system but rather on why some politicians have access to so much money and moving it abroad.

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