Executives at Perbadanan Usahawan Nasional (PUNB) – Malaysia’s National Entrepreneur Corporation – appear to have taken their remit rather too literally.
Unnamed senior officials at the state-funded agency, which aims to encourage indigenous Bumiputera business, seem to have been a little too enterprising with their sources of funding over attempts to issue $5 billion of unauthorised bonds.
The venture capital agency, which only has paid-up capital of M$100 million ($26 million), now finds itself at the centre of an investigation by Malaysia’s anti-corruption agency after an executive was arrested on his return from Singapore.
Full details of what had been widely dubbed locally as a bond scam are still to materialise, but it seems that at least three senior PUNB officials were involved in the exercise.
In addition to company executives, a local businessman, a British national and a Singaporean have been implicated in the affair.
Fake bond certificates with a total face value amounting to $5 billion have been seized from PUNB offices.
A certificate is also reported to have been sent to an unnamed broker in London for marketing, with the intention it should be used as collateral against a loan.
The deep-discount bonds were dated October 13 2000, had a 10-year maturity and were apparently signed by the organisation’s chief executive officer and its secretary, Ahmad Zukni Johari and Mohamad Aminuddin Zain.
An official at PUNB says Ahmad no longer works for the agency, having left last year. No replacement has been appointed, she says.
Senior anti-corruption agency officials were unavailable for comment, but key to the issue appears to be the company’s failure to gain Ministry of Finance or central bank approval for the bond issue, though other reports stress that the issue only involved individuals rather than there being any impropriety by the company itself.
Bond market participants in Malaysia were at first unnerved by the revelations, but have been comforted by the fact there was no apparent transaction and that the matter had been nipped in the bud before any cash had been raised.
Perbadanan Usahawan Nasional was set up in 1991 as a commercial organisation owned by the Bumiputera Investment Foundation and backed by the government.
Its aim is to develop entrepreneurship amongst the country’s ethnic Bumiputera community, who are seen by some as requiring additional support, often through Islamic funding structures, to enable them to compete with the local Chinese business community.
The company stresses its high ethical values, including transparency and states that it is “honest and trustworthy”.
Since its formation it claims to have helped 276 Bumiputera entrepreneurs through investments totalling M$336 million in 90 companies.
