KUALA LUMPUR, Jan 27 — Opposition leader Datuk Seri Anwar Ibrahim demanded the Ministry of Finance verify and explain news reports that Genting Hong Kong has RM2.5 billion in collateral-free loans from three Malaysian banks.
Maybank, CIMB and RHB are said to be among the chief creditors of the cruise operator that was being wound up, with a combined exposure of US$600 million (RM2.5 billion), according to a report by Singapore’s Straits Times that said how the banks decide the deal with Genting HK would determine if it “sinks or swims.”
Permodalan Nasional Berhad, Khazanah Nasional Berhad and the Employees Provident Fund are major shareholders in the three banks and could be exposed to any failure to recover the loans.
Unsecured loans are typically considered to be high-risk to lenders as the debt is not backed by any asset, leaving the lender with nothing to claim in the event the borrower defaults.
Anwar said this made it imperative for Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz to clarify matters.
“I am urging the finance minister to answer immediately as to why these banks were allowed to give an unsecured loan to Genting HK,” the Port Dickson MP said in a statement published on his Facebook page.
“This is because through PNB, Khazanah and EPF they are the largest shareholders in the three banks. How is it that the guarantee-free loan was given with such ease?” he added.
The cruise operator filed to be wound up on January 19, about a week after its German shipbuilding subsidiaries went bankrupt, after the coronavirus pandemic hammered the industry.
Covid-related travel curbs have battered the global cruise sector hard, but particularly in Asia where many countries’ borders remain closed to tourism.
Genting Hong Kong — linked to the Genting Group, founded in Malaysia and with interests ranging from casinos to property — said it had “exhausted all reasonable efforts” to negotiate with creditors and stakeholders.
Maybank has since denied allegations that it will face major financial trouble due to exposure to Genting HK, calling the Straits Times’ report baseless.
CIMB Bank Bhd said it does not disclose or comment on specific names or clients.
“Given the worldwide pandemic, certain sectors such as leisure and hospitality are inevitably affected. In this context, CIMB has already taken proactive measures, such as prudent provisioning, to protect our asset quality,” the bank said in a statement.
The Singapore paper suggested that huge provisions caused by the beleaguered cruise operator would have a huge impact on their profits and share prices.
Anwar has also urged the finance minister to explain how the banks will recuperate the RM2.5 billion given to Genting HK when the firm is bankrupt.
“To me this explanation must be hastened to avoid a repeat of the Bumiputra Malaysia Finance Hong Kong scandal,” the PKR president asserted.