Crackdown on loansharks after debtors tortured in Malaysia

PUBLISHED : Thursday, 04 June, 2009, 12:00am
UPDATED : Thursday, 04 June, 2009, 12:00am

The horrific ordeal of three debtors who were chained to a wall, beaten and starved for two months has prompted a crackdown against illegal loansharks in Malaysia.

Their plight, which came to light last week when they were rescued by police, has sparked an outcry against loan-sharking syndicates that are controlled by both traditional triads and newer criminal gangs.

The three victims, whose names have been withheld, were held in a makeshift prison run by the loansharks, known as ah longs, for failing to repay their debts.

Police said they had not seen such a long-term, organised tactic enacted as retribution by loansharks, who typically break their victims' limbs or splash their homes in red paint.

Police said the three were held captive in a shop lot that had been converted into a private jail as their families tried to raise money to secure their release.

All three were skilled construction workers who lost their jobs in the economic downturn and had borrowed between M$1,500 (HK$3,300) and M$4,000 to make ends meet, the wife of one of them said.

'We just wanted some money to tide us over until our husbands got new jobs,' said the wife who gave the name Madam Guan.

'I knew where they were held but dared not call the police,' she said, adding that she feared the syndicate might find out and punish her and its captives.

The victims were rescued on May 27 and images of the men, gaunt and chained, hit the front pages the next day, sparking an outcry.

'I have never seen anything this scandalous in my 30 years as a helper,' said Michael Chong, 60, who runs a help centre for people in distress, including those fleeing from loansharks.

Mr Chong, who mediates between loansharks and their debtors, said: 'This case shows loansharks have really gone overboard. They are a menace and must be eradicated.'

Prime Minister Najib Razak joined the clamour expressing shock and ordering the police to crack down on loan-sharking that experts say has grown into a billion-dollar enterprises structured like modern financial corporations.

Chief of the National Police Musa Hassan said loansharks had grown 'big and bold' and were connected with secret societies, criminal groups and gangsters.

'They charge high interest and are willing to use force because the business is very lucrative,' he said, urging people in need of loans to use licensed money lenders and financial institutions like banks.

Police have released photographs of four syndicate bosses whose arrest would cripple loan-sharking.

Besides going after the bosses, police have been tearing down the ubiquitous posters and leaflets offering cheap loans, and say they are pursuing people who put the adverts in newspapers.

But opposition lawmakers and crime journalists scoff at the police crackdown, saying the loanshark syndicates are well connected with the law enforcement agencies and the political establishment and are unlikely to be eradicated any time soon.

Older triad organisations, like Sio Sam, meaning Three Little Emperors, and newer gangs like K9 and criminal groups identified by numbers like Gang 08, 21 and 24 are involved in the money business.

'The syndicate bosses often hold legitimate business as fronts and some are even members of ruling political parties,' said a senior editor with a Chinese-language daily who declined to be identified.

'Each time there is a national outcry the police launch an operation, arrest a few fellows and soon everything quiets down and it is back to business as usual,' said the editor.

Mr Chong said that borrowers were not only drawn from the working classes, but now included doctors, lawyers and other professionals who had been hit by the downturn and needed cash. With a reputation to protect, many of them would not approach a bank.

'They fear losing face,' Mr Chong said, adding that shortage of ready bank credit was also pushing more people to loansharks.