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Malaysian Indian education body hit by scam

A major scam followed by public airing of allegations has tarnished the image of Maju Institute of Educational Development, part of the business arm of the Malaysian Indian Congress.

india Updated: Mar 02, 2009 13:14 IST

A major scam followed by public airing of allegations has tarnished the image of Maju Institute of Educational Development (MIED), part of the business arm of the Malaysian Indian Congress (MIC).

MIC chief S. Samy Vellu has traded allegations with former MIED chief and his long time confidante, Chitrakala Vasu, a media report said.

A senior MIED officer told a press conference Friday that the money was collected for Sri Lankan tsunami victims but since it was not used, the money would be transferred to Yayasan Pemulihan Sosial (YPS), the social arm of the MIC.

Vasu denies allegations of financial misappropriation while Vellu Sunday called her "a desperate woman".

Investigations are on. The police said they have recovered 1.7 million Ringgits (approx. $455,429) of the missing 5.25 million Ringgits that belongs to the body that runs a number of educational institutions.

It is learnt the money was recovered from the bank account of one of MIED's top executives by the Commercial Crimes Investigations Department (CCID). Sources said the police hoped to recover more money as the investigation progressed, The Star newspaper said Monday.

They said police officers assigned to investigate the case had recorded statements from a number of MIED staff and executives after a report was lodged recently by MIC vice-president S. Sothinathan.

The scam has fanned dissension within the MIC.

Penang state Deputy Chief Minister P. Ramasamy said the community wanted to know what had happened to the funds.

"He (Samy Vellu) can choose a date and hold a meeting to explain this to the people," he said.

CCID deputy director Noryah Mohammed Anwar confirmed the police had recovered part of the money but declined to elaborate.

A senior MIED officer Saturday lodged two police reports against an MIC politician.

Vellu last month said a top MIED official had been identified as being responsible for the missing funds and hinted that more discrepancies would be exposed.

Vellu says the MIED had given educational loans to 12,500 students since 1984 and about 9,000 had failed to repay their loans.

Vasu, 38, who was removed Saturday, accused Vellu of financial misappropriations and said that senior MIC officials were responsible for siphoning off the funds. "Let police find the crook," The Star newspaper quoted her as saying.

In a report lodged at the Shah Alam police station here, Vasu said she was informed that many files were removed from the MIED office Jan 2 on the instructions of a "top MIC official".

Vellu responded: "There has never been a greater case of breach of trust by an employee of MIED.

"She is nothing more than a thief devoid of any morals and standards of decency.

"Let me say in no uncertain terms that she and others who are responsible for the misappropriation of MIED funds will be brought to book.

"No amount of threats and personal attacks on me will deter me from that cause."

Vasu, who joined MIED as an accountant in the late 1990s, resigned in 2002. She was brought back on board in 2004 as its CEO.

MIED, whose core business is providing study loans, sourced millions from the ethnic Indian community, received funds from the government and acquired a loan from Bank Pembangunan Malaysia to build the the Asian Institute of Medicine, Science and Technology (AIMST) campus.