Scribd Logo
Upload

Welcome to Scribd!

  • 411 views

    Maminco Sdn. Bhd. Scandal Case Study

    Uploaded by

    mohd athoi
    Maminco Sdn Bhd was set up with RM2 to artificially increase tin prices on the London Metal Exchange through secret futures contracts and loans from Bank Bumiputera. When the US released stockpiles of tin, crashing prices, Maminco collapsed under its debts. The government established Makuwasa Sdn Bhd to bail out Maminco's debts, but it was riddled with corruption and mismanagement, becoming a major financial fraud. The Maminco scandal highlighted the poor decision making and lack of accountability of Malaysian organizations and government in the tin industry at the time.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd

    Maminco Sdn. Bhd. Scandal Case Study

    Uploaded by

    mohd athoi
    411 views7 pages
    Maminco Sdn Bhd was set up with RM2 to artificially increase tin prices on the London Metal Exchange through secret futures contracts and loans from Bank Bumiputera. When the US released stockpiles of tin, crashing prices, Maminco collapsed under its debts. The government established Makuwasa Sdn Bhd to bail out Maminco's debts, but it was riddled with corruption and mismanagement, becoming a major financial fraud. The Maminco scandal highlighted the poor decision making and lack of accountability of Malaysian organizations and government in the tin industry at the time.

    Original Description:

    study

    Original Title

    Maminco Athoi & Hakimi

    Copyright

    © © All Rights Reserved

    Available Formats

    PPTX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Maminco Sdn Bhd was set up with RM2 to artificially increase tin prices on the London Metal Exchange through secret futures contracts and loans from Bank Bumiputera. When the US released stockpiles of tin, crashing prices, Maminco collapsed under its debts. The government established Makuwasa Sdn Bhd to bail out Maminco's debts, but it was riddled with corruption and mismanagement, becoming a major financial fraud. The Maminco scandal highlighted the poor decision making and lack of accountability of Malaysian organizations and government in the tin industry at the time.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    411 views7 pages

    Maminco Sdn. Bhd. Scandal Case Study

    Uploaded by

    mohd athoi
    Maminco Sdn Bhd was set up with RM2 to artificially increase tin prices on the London Metal Exchange through secret futures contracts and loans from Bank Bumiputera. When the US released stockpiles of tin, crashing prices, Maminco collapsed under its debts. The government established Makuwasa Sdn Bhd to bail out Maminco's debts, but it was riddled with corruption and mismanagement, becoming a major financial fraud. The Maminco scandal highlighted the poor decision making and lack of accountability of Malaysian organizations and government in the tin industry at the time.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 7

    MAMINCO SDN.

    BHD. SCANDAL
    CASE STUDY
    ATHOILLAH BIN HOSNI (DL1732647)
    MUHAMMAD HAKIMI ZAFAREN BIN MOHAMED
    ZAKIR (DL1736091)
    MAMINCO SDN. BHD. SCANDAL CASE STUDY

    • Malaysia's tin industry was once second leading in the


    world as it paid a great contribution to the national
    economy.
    • It produced a numerous thousands of tones, or 31% of
    world output
    • Maminco Sdn Bhd, which cost just RM2, was set up and
    used to lift tin prices on the London Metal Exchange with
    Bank Bumiputera Bank loans and secretly purchase tin
    future contracts.
    • The untimely release of the strategic tin stockpile of the
    United States. The worldwide tin industry then crashed,
    unable to support the excessively high prices.
    • Maminco Sdn Bhd was unable to sustain the price of tin
    after successfully driving the price up and so it collapsed.

    2
    CONT’
    • The business owned about 1.6 billion shares of the bank.
    Instead of recognizing that it was their errors, the
    government established another business called
    Makuwasa Sdn Bhd after the RM 2 Company incident.
    • Without the documents required by the Executive
    Committee and the Board of Directors, the loan was
    entrusted to a corrupt politician.This firm has bailed out
    about 1.6 billion from BBMB and is viewed as a major
    financial fraud involving money laundering.
    • One of the securities companies (Makuwasa Securities
    Sdn Bhd) was appointed by the Prime Minister to recover
    business line operations without and losses. Makuwasa
    was intended to make significant profits from the sale at
    preferential rates of blocks of shares allocated to it.

    3
    WHAT WE LEARNT FORM THIS CASE
    • An option on a futures contract gives the holder the right, but not the duty, to
    purchase or sell a particular futures contract at an exercise price on or before the
    expiry date of the option.
    • These function similarly to stock options, but vary in that a futures contract is the
    underlying security.
    • Maminco Sdn Bhd attempted to control the selling price of tin to build demand, , the
    tin industry faced a bullish market. As a result of this incident, it is not difficult to see
    that the operation and management of the organization and the government have
    been bad decision-making
    • When they set up an RM 2 business to purchase their future contracts, but most
    importantly, to cover the losses and repay the bank, it is to artificially increase tin
    prices.

    4
    CONT’
    • Maminco Sdn Bhd should come up with option strategies
    which is combination strategies where the company
    combines an option with the underlying asset in such a
    way that overall position either reduces or eliminate risks
    • Maminco already make long call in future contract, they
    are expecting the price will rise but the price falls because
    of the US released their stockpile of tin in the market to
    stabilize it
    • Maminco should long put also since their strategies failed
    in order to recover the loss of long call. This will help the
    company to minimize the losses in the tin stock price.

    5
    CONCLUSION

    • Maminco affair occurred and brought huge impact to the society and the people.
    The poor decision, low credibility and accountability will affect company reputation.
    • Inaction and delay of the Government in dealing with fraud and corruption crimes,
    particularly in high places, as in the case of the BMF, it also refers to a government
    that refuses to be accountable.
    • The need is to tackle the activities of foreign fraudulent activities and criminals and
    not to conceal evidence as was not permitted to be presented in court in the case
    of BMF whereby 150 telexes sent 397 between the British, Hong Kong and the
    Malaysian Government, which could shed light on the case
    • History has shown that corruption was essentially caused by dishonest individuals
    who gave in to temptations when they were given the opportunity

    6
    THANK YOU

    You might also like