Wednesday, April 30, 2008

Wives of BN officials caught up in scandal

Wives of BN officials caught up in scandal

Wednesday, 30 April 2008
They took title deeds and funds from welfare group after election loss

The murky goings-on at Balkis, which are being replicated in other states such as Penang and Perak which also fell to the opposition in the elections, have since turned into a major scandal over the alleged abuse of public funds by organisations associated with the BN.

BY THE BOOK: Datin Seri Zahrah holding a two-page statement which says that the transfer of funds out of the Balkis accounts was done in line with the organisation's Constitution. -- PHOTO: THE STAR/ASIA NEWS NETWORK

SOON after winning the Selangor state legislature last month, the opposition Parti Keadilan Rakyat (PKR) ordered that the state administration buildings and the offices of key state agencies be sealed and nothing be removed.

But they overlooked the premises of a state-funded welfare organisation, Balkis, operated by the wives of the Barisan Nasional (BN) politicians who lost in last month's general election.

Two days after the March 8 polls, key Balkis officials arrived at its office in the Selangor capital of Shah Alam and carted away documents and title deeds of properties it owned.

Another RM9.9 million (S$4 million) in cash deposits were transferred out of the organisation's bank accounts by Balkis officials led by Datin Seri Zahrah Kecik, the wife of former Selangor chief minister Khir Toyo.

The murky goings-on at Balkis, which are being replicated in other states such as Penang and Perak which also fell to the opposition in the elections, have since turned into a major scandal over the alleged abuse of public funds by organisations associated with the BN.

'The whole situation is very disturbing, and there is certainly the possibility of criminal breach of trust in the entire affair,' said Bar Council vice-president Ragunath Kesavan.

The following account is based on interviews with key Selangor state government officials and documents made available to The Straits Times.

Balkis was set up in May 1985 as a non-political welfare organisation which opened its membership to the wives of the elected representatives of the state.

It was primarily a BN vehicle, although its charter did not discriminate between government and opposition elected representatives.

But opposition politicians saw Balkis as one of many similar groupings that made up a nationwide political patronage network built on public funds to finance the political activities of the ruling coalition led by Umno.

Balkis, as the main welfare organisation in Selangor, received strong financial support.

According to state government documents, Balkis was awarded a choice piece of property from the Selangor State Development Corp at a concessionary price of RM250,000 in 2000.

The documents also showed that between early 2006 and September last year, Balkis received donations amounting to RM600,000 from the Selangor State Development Corp to finance various activities, including its annual dinner, the opening ceremony of its administrative office and political activities of the wives of elected representatives.

The welfare organisation often turned to other state agencies to fund other activities, including overseas trips for its key office bearers, state government officials say.

The halcyon days enjoyed by Balkis came to an abrupt halt in the late hours of March 8, when Selangor, together with four other states, fell into the control of Malaysia's opposition headed by former deputy premier Anwar Ibrahim.

As the Balkis charter stipulated that the organisation must be headed by the wife of the sitting chief minister, Datin Seri Zahrah faced the immediate prospect of having to relinquish her position as head of the organisation in favour of the wife of the incoming chief minister from the PKR-led opposition.

To sidestep any handover, Datin Seri Zahrah and her committee members comprising the wives of other BN candidates moved to dissolve Balkis.

According to state government officials, Datin Seri Zahrah and her colleagues turned up at the Balkis administrative office on March 10 and told employees that they intended to alter the welfare organisation's charter to avoid relinquishing control.

They carted away documents, including title deeds and bank statements, officials say.

A day later, the Balkis committee led by Datin Seri Zahrah held an emergency meeting to dissolve the organisation and withdrew RM9.9 million in cash deposits held by the organisation.

They planned to establish a new organisation that would limit membership to wives of BN leaders.

In the interim, Datin Seri Zahrah and her colleagues sought refuge with Bakti, a welfare organisation headed by the wife of the Prime Minister and senior Cabinet ministers.

According to the minutes of a Bakti meeting obtained by The Straits Times, Balkis and another BN-sponsored welfare society from Penang, called Bunga Tanjung, approached the national-level organisation to help them to 'receive and manage their funds for their welfare activities in the interim period'.

Bunga Tanjung transferred RM350,000 to Bakti, while Balkis placed RM9.9 million for safekeeping, the minutes showed.

The Bakti minutes showed that Datuk Heliliah Yusof, its legal adviser who is also a judge in Malaysia's Court of Appeal, endorsed the plan.

In the meantime, the PKR-led Selangor state government has asked the National Registration Department to reject the dissolution of Balkis and is demanding that the transferred funds be returned to the organisation.

But Balkis and its former patron, Datuk Seri Khir, maintained that they did nothing wrong, and that all actions by the committee led by his wife were legal.

'Don't talk rubbish and refer to our lawyer,' the former chief minister told reporters this week.


March 8: Selangor and four other states fall into the hands of the Parti Keadilan Rakyat-led opposition alliance in last month's general election.

March 10: Datin Seri Zahrah Kecik, wife of the former Selangor menteri besar, Datuk Seri Khir Toyo, goes to the Balkis office with her lawyers, and important documents are taken away.

March 11: The Balkis committee holds a special meeting to dissolve the organisation. Bank accounts with deposits amounting to RM9.9 million (S$4.3 million) are closed, and the funds transferred to Bakti.

March 13: Balkis applies to dissolve the organisation with the Registrar of Societies.

April 23: The new Selangor menteri besar, Tan Sri Khalid Ibrahim of the PKR, writes to the Registrar of Societies demanding that the application to dissolve Balkis be rejected and all funds transferred back.

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