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New Straits Times

Busted: Scrap iron smuggling syndicate which caused RM950mil in losses

GEORGE TOWN: A syndicate operating in five states has been smuggling scrap iron out of the country, causing the government to lose some RM950 million in export duties over the past six years. The syndicate would send shipments of the scrap iron out by declaring them to be machinery or other, less valuable metals, circumnavigating the system to avoid paying the 15 per cent export duty to the government. The syndicate was also believed to have paid bribes to enforcement officers to turn a blind eye to their activities. Their activities, however, were crippled when the Malaysian Anti-Corruption Commission carried out simultaneous raids at premises in all five states beginning at 6pm yesterday. The raids, codenamed Op Metal, were carried out by MACC's Special Operations Division through a Multi Agency Task Force (MATF) with the Customs Department, Internal Revenue Board and Bank Negara Malaysia at 19 locations in Penang, Selangor, Negri Sembilan, Johor and Kedah melalui operasi Op Metal. A Harian Metro journalist followed the raids at several residences and business premises owned by the syndicate in Penang. The officers involved in the raid were protected by armed members of the MACC's Anti-Corruption Tactical Squad (ACTS). At one particular three-storey residence equipped with its own lift and owned by a syndicate member, several luxury cars with special registration numbers could be seen parked in the compound. The individual, who is also the owner of a company and holds a "Datuk" title, is alleged to have exported scrap iron overseas without paying export duties by bribing enforcement officers. The syndicate gets high prices for the metal in several countries as there is a large demand for them. Meanwhile, a raid at a factory in Jalan Bukit Minyak, Bukit Mertajam, at 9pm, saw several workers, most of them foreigners, surprised by the MATF members, operating under the watchful eyes of ACTS personnel. Checks in the factory compound turned up piles of scrap iron, some of which had already been processed into cubes. According to sources, the raids involved scrap iron processing and storage centres, offices and residences of people believed to be part of the syndicate. "Initial investigations have found that the syndicate would smuggle crap iron to India, China and several other countries by declaring them to be machinery or machine parts, or other metals which are not subject to export duties of 15 per cent. "In order to ensure that these consignments are cleared without the export duties having to be paid, the syndicate is believed to have given bribes to some enforcement officers," said a source. He said the collusion of these crooked enforcement officers has caused the government to lose roughly RM160 million a year in export duties. With the syndicate having begun such operations six year ago, said the source, the estimated losses were placed at RM950 million. The source said investigations were still ongoing, with MACC expected to announce the amount of seizures and arrests made by today. Meanwhile, MACC Chief Commissioner Tan Sri Azam Baki, when contacted, confirmed the raids in the five states. He said the case was being investigated under Section 4(1) of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLATFPUAA). He added that the investigation will also focus on identifying those involved, including civil servants who protected these activities.