r April 1984 KEESING'S VOLUME xxx 32785 As the facts emerged, both UMNO and opposition MPs criti- announced the formation of a new Communist Party of Malaysia cized the Bank Bumiputra and the government for maintaining by the amalgamation of the Communist Party of Malaya-Marxist a silence over the issue. Amid allegations of a cover-up, Mr Lim Leninist (CPM-ML) and the Communist Party of Malaya- Kit Siang made repeated calls for a Royal Commission to investi- Revolutionary Faction (CPM-RF), both of which had seceded gate the affair under Malaysia's Commission of Inquiry Act. On from the CPM itself in 1970 because of the latter's Maoist policy Sov. 2,1983, two members of BMF's board were removed together of promoting rural rather than urban revolutionary struggle. rvith a senior general manager at Bank Bumiputra. The Prime (Times - Guardian - Daily Telegraph - Financial Times - Le Minister also announced on Jan. 1 I, 1984, that a committee of Monde - Neue Ziircher Zeitung - International Herald Tribune - inquiry would be set up, but that it would act under Bank BBC Summary of World Broadcasts - Far Eastern Economic Bumiputra's own articles of association even though the bank Review - Economist) (Prev. rep. Internal political developments would be instructed to select members nominated by the 32318 A, 31661 A; Relations with China 31661 A) The government defended its decision for an in-house inquiry, saying A. NEPAL - Political and economic developments [hala formal Malaysian commission of inquiry would not have jurisdiction - Foreign relations in Hong Kong and would be bound to conduct its affairs publicly; these arguments were dismissed by Mr Lim Kit Siang as "not convincing at all". Political opposition to government (August 1983-January A public scandal undermining confidence in Bank Bumiputra could 1984). lave been very damaging to the government's New Economic Policy Economic problems and foreign aid (October 1983- (YEP), 70 per cent of Bank Bumiputra's equity having been transferred ro Permodalan (Permodalan Nasional Berhad-National Equity Corpor- January 1984). srion), the government investment agency and spearhead of the govern- Foreign relations (March-December 1983). nents policy to aid ethnic Malays. It was reported that additional loans had been extended to Carrion after its liquidity problems had become The government of Mr Lokendra Bahadur Chand, which had Ipparent, and that this had been an attempt to push through debt restruc- been appointed on July 13, 1983 [see 32321 A], had come under wing proposals and thereby to cover up the problem; moreover, it ran criticism in the following months from members of the National anrrary to the philosophy of the NEP [see page 316631 for the BMF to Assembly (Rashtriya Panchayat); a motion of no confidence was kso involved in lending money to Hong Kong businessmen rather than filed on Aug. 22 by a group of 48 members led by Mr Dil Bahadur xing it to aid the development of the Malay community. The allegations Shrestha, but was disqualified on Aug. 3 1 on the technical grounds oibribery also damaged the credibility of the government which in the :B81 elections had pledged "clean, efficient and trustworthy government" that it was against a clause in the constitution. 'iee31661 A]. It was alleged that Tengku Tan Sri Razaleigh Hamzah (the The motion accused the government of corruption in connexion with F~nanceMinister and a former managing director of Bank Bumiputra in the proposed purchase of a Boeing 727 for Royal Nepal Airlines, and of i970-76) had known about BMF's activities, a suggestion which was creating "groupism" in the Rashtriya Panchayat-political parties not :~pectedto hamper his bid to be elected deputy leader of UMNO [see being permitted under the panchayat system [see 30570 A]. In a speech !lie above for alleged involvement of Dato Lee San Choon]. in November the previous Prime Minister, Mr Surya Bahadur Thapa [see 32321 A], attacked the new government for being under the influence of Relations with China and Vietnam "rightist" elements which were opposed to further democratization of the It was reported on Sept. 4, 1983, that a 20-strong Malaysian panchayat system and which were dividing the crown from the people, rdral commando unit had landed on the atoll of Terumbu Layang creating a situation in which "the crown's leadership will be weakened Lagang, which constituted part of the Spratly islands variously and national unity will be undermined". :]aimed by Vietnam, China, the Philippines and Taiwan. The A number of changes to minor government posts occurred in Chinese and Vietnamese governments, both of which claimed the October and November 1983 in what were seen as moves to !loll, protested at the Malaysian "occupation", but in its reply strengthen the government's position. Jn Sept. 14 the Malaysian Foreign Office asserted that both the The Minister of State for Tourism, Mr Deepak Bohara, resigned on 5es. ~~olland Amboyna Cay (a Vietnamese-occupied island situated Oct. 23 having admitted "moral responsibility" for irregularities in the the rlkilometres further south-east) "lay within Malaysia's 200-mile proposed Boeing 727 purchase [see above], while on Nov. 14 certain :conomic zone and had always been marked as Malaysian terri- politicians who were known to be loyal to Mr Thapa were removed in a reshuffle of ministerial secretaries. ')ry on maps of the area". It was announced on Oct. 3 that the The Prime Minister, Mr Chand, had announced soon after led Valaysian and Vietnamese Foreign Ministers had agreed to iriendly" negotiations on their respective claims. assuming office that all political prisoners (except those held on iary criminal charges) would be released, and on Aug. 30 Mr Padma >e Spratly islands were valuable for their strategic location dominating had Sunder Lawati, the Minister for Home Affairs and Local hies .:mC jcs maritime routes across the South China Sea, and for the huge Administration, said that the government had freed 52 political knd -rents of oil and natural gas which were believed to lie beneath them ::roackground to Chinese and Vietnamese dispute over possession of prisoners to date. ida- ,-:Spratly islands see page 31 149 A]. The Far Eastern Economic Review for The leaders of the banned Nepali Congress and the Nepal Communist :Sept.29,1983, claimed that the occupation of the atoll had taken place Party, together with Mr Tanka Prasad Acharya, the veteran former .inst :zrime when the Malaysian government was strengthening its military People's Party leader and Prime Minister of Nepal in 1956-57 [see 14716 A .ira on Sarawak and Labuan, and that the moves heralded the and 15741 A], had earlier issued a statement calling on the government ?her -olementation of a programme to develop the gas and oil fields in its to alter its policy of "negligence" with regard to the release of political ltral ::atomic zone. prisoners and had claimed that 168 people were still in jail for political :res- Slr Wu Xueqian, the Chinese Foreign Minister, said on Feb. offences. ~sed :;, 1984, during an official visit to Malaysia, that the Chinese It was reported on Sept. 30 that in accordance with the ban on aled ljnrnment would not end its "moral support" for the Communist political meetings the police had arrested 300 students and had 3. of Inyof Malaya (CPM). A statement broadcast on the clandestine placed two leading politicians under house arrest for taking part (on€ ldiostation "Voice of the People of Malaysia" on Dec. 11, 1983, in a political convention. On Dec. 30 a large number of opposition .