The cooperatives debacle in the 1980s and the current money game scams are two very different things, but they nevertheless reflect the same kind of quality of our people over three decades, the much the same level of government enforcement standards as well as the trend of continuously sliding social values.
The younger generation may not have much idea how the local Chinese cooperatives pooled together community funds to invest in large corporations in a bid to boost the Malaysian Chinese economy.
When the BN government introduced the NEP, the MCA leaders were worried Malaysian Chinese economy would be cast behind. So they proposed to pool community funds together.
Lee San Choon set up Multi-Purpose Holdings through which Koperasi Serbaguna Malaysia (KSM) was formed. Within only a few years, holding companies and cooperatives mushroomed, as rural folks dug out their lifetime savings to invest.
It was reported that as many as 3,200 cooperatives were in operation at that time, boasting collectively more than 2.5 million members and RM4.2 billion in assets.
There are similarities between the cooperatives of the 1980s and the money game scams we have today.
First and foremost, exceptionally lucrative returns. The deposit rates offered by Chinese cooperatives were between 13% to 20%, far higher than the 9% to 10% offered by financial institutions in those years. The returns of get-rich-quick schemes, meanwhile, is even more attractive, at 20% or even 30% per month! Both have promised instant riches for the have-nots.
July 1986, news of a bunch of KOSATU (Koperasi Belia Bersatu) depositors failing to get their money sparked an unprecedented bank run. After the general elections on August 2, Bank Negara froze the assets and activities of this and another 23 cooperatives under the Essential (Protection of Depositors) Regulations 1986.
The country was suffering from a recession at that time, while the economy today is not much better. Many people wanted some quick cash to address the pressure of life. When a bank run happened to the first cooperative, a confidence crisis was triggered and it developed into a domino’s effect. Similarly, following the collapse of JJPTR, the other money game companies may eventually go bust because fewer and fewer people will join them, making it difficult for them to pay off the investors.
Secondly, slow government actions. When the government froze the assets of 24 Chinese cooperatives for illicitly receiving public deposits, their leaders claimed that they had been permitted to take deposits when they applied to register their companies.
The grey area that existed in the 1980s remains much the same today. Bank Negara, the police and domestic trade industry all have no idea who should take the first initiative to tackle money game scams.
Poor enforcement efficiency and lenient or non-existent punishments have contributed to the utter chaos in our society, making our laws unenforceable.
Thirdly, the con-men have recycled the pretext of “boosting the economy” in a bid to win the approval of investors. For instance, JJPTR founder Johnson Lee’s father has described the scheme as a systematic, moral forex investment company capable of lifting the Malaysian economy.
Following the burst of the cooperative bubble, company directors were hauled to the court one after another to face CBT charges. How do we expect this kind of dishonest people to ever lift the country’s economy? They will only add to our economic plight. Lifting the national economy through money game? Fat hope!
Sadly the moral concept of Malaysians has shown little improvement over the decades. A retired school principal who became the branch manager of a cooperative took his own life under peer pressure. But today, a doctorate holder doesn’t even feel the slightest shame for his involvement in despicable money game, while an old woman broke ranks with her daughter just because she insisted to attend a dinner sponsored by Zhang Jian.
Money game companies have exploited charity and education to whitewash their crimes. Even though the school directors were well aware of what Zhang Jian had done, they still willingly accepted his donation.
The popularity of money game has exposed the erroneous money concept many Chinese Malaysians have. When the size of a person’s wealth becomes his only goal in life, he will never be able to tell between what is right and wrong, and we cannot pin our hopes on these people to make positive contributions towards the society and nation. The future of Malaysian Chinese community will remain gloomy even if we are able to produce thousands more of multi-millionaires.
Even if money game is eventually put under control by the authorities one day, similar incidents will keep popping up in future if we don’t change our mentality. The cheating tactics will only get more sophisticated with the advancing technology.