MONEYLENDERS (AMENDMENT) BILL

Order for Second Reading read.

The Minister for Law (Prof. S. Jayakumar): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Sir, this Bill amends the Moneylenders Act to increase the quantum of penalties for illegal moneylending and unwarranted harassment and intimidation of debtors, to create a new offence in that regard and to give greater powers to the Police under the Act.

Members, I am sure, would have read numerous accounts in the press of illegal moneylenders or loansharks resorting to the use of threats and violence in extracting payment from debtors for loans given. These loans were often at exorbitant rates of interest. They prey on debtors who, having no access to the usual channels of raising finance, had no recourse except to look to those loansharks for their funds.

The number of cases of illegal moneylending reported to the Police has shown a marked increase over the last six years. In 1992 alone, a total of 700 cases were reported which is more than double the number of cases reported in 1987 and more than the total number of cases reported for 1987 and 1988. The figures for 1992 represent an alarming increase of more than 32% from the figures for 1991. The number of harassment cases involving the use of threats and force has also increased, sometimes even inflicting grievous hurt.

Sir, we must act swiftly and decisively in sending a strong message to all illegal moneylenders that such activities will not be tolerated. The Bill seeks to do this by combining substantial increases in the penalties meted out for such activities together with greater powers of investigation and enforcement on the part of the Police.

The existing legislation does not provide for adequate penalties to deter such illegal activities. The amendments will provide for an increase in the fines imposed on illegal moneylenders from the present maximum of $5,000 to fines of between $10,000 and $100,000 for the first-time individual offenders. In the case of repeat offenders, the fines have been increased to between $20,000 and $200,000 from the present maximum fine of $5,000. In addition, such offenders may also be jailed up to a maximum of 12 months.

For companies, the Bill increases the penalties to fines of between $20,000 and $200,000 from the present maximum of $10,000 regardless of whether the company offender was the first-time offender.

For illegal moneylenders who resort to harassment and intimidation in the course of extracting repayment from debtors, they will be liable to increased penalties of between $2,000 and $20,000 from a maximum fine of $2,000. In addition, such offenders will also be liable to be jailed up to a maximum of 12 months from the present maximum of three months. Companies which resort to such harassment practices will also face increased fines of between $4,000 and $40,000 compared to the present maximum fine of $5,000.

A significant provision in this Bill is the creation of a new offence to deal with debt collectors, hired by illegal moneylenders, to recover their loans. The present law does not make it an offence for such debt collectors who also resort to harassment and intimidation in the course of their debt collection activities. Such debt collectors will now face identical penalties to those faced by illegal moneylenders in the Bill. Over and above these penalties, the Bill also introduces a special penalty where the illegal moneylender or debt collector causes hurt in order to recover a debt. For such aggravated offences, the courts can impose caning of up to six strokes in addition to the penalties I have just mentioned.

In order to facilitate and expedite investigation and prosecution of such offenders, the Bill makes such offences seizable and non-bailable. This will enable the Police and the courts to effectively enforce and give effect to the increased penalties and new offences introduced in this Bill. The Police, therefore, will have powers to arrest, without warrant, anyone suspected of having committed an offence under the Act and to examine any person acquainted with the facts of the case. Bail will also be disallowed in cases where the suspect may be involved in the commission of other offences or where accomplices are at large.

Sir, I hope Members will agree that these amendments are both timely and necessary in order to check the growth of the problems caused by loansharking. We cannot let such activities go unchecked as they would have severe social and law and order consequences on the members of our community.

Sir, I beg to move.

Question proposed. 2.03 pm

Dr Arthur Beng Kian Lam (Bedok GRC): Mr Speaker, Sir, I rise to support the Bill. Sir, I could not agree with the Minister more that we must act swiftly and decisively to send the correct message to these parasites of society.

Sir, every MP in this House would have been approached by his residents on this problem of harassment by moneylenders. Often, innocent parties, like the wife and children, are also harassed and threatened. Worse still, in cases of mistaken identity, grievous hurt can be inflicted on the innocent. I thus welcome the proposed enhanced penalties and the extension of these penalties to debt collectors.

Sir, I would just like to bring another point to the Minister's attention. I am sure the Minister is aware that there is another aggrieved party, that is, the owners or managers of common property, for example, the Town Councils. Often, threatening messages and graffiti are pasted or even sprayed in the void decks, lifts and lift lobbies. It causes a great deal of money to get all these rectified. Should not these vandals also be made to pay for defacing these common properties?

Mr Zulkifli bin Mohammed (Jalan Besar GRC): Mr Speaker, Sir, I join my colleague in commending the Minister for Home Affairs for taking the initiative to amend the Moneylenders Act.

Sir, this is a move that has been anxiously awaited and will go a long way towards alleviating the suffering of those who have become victims of loansharking activities.

Sir, from newspaper reports several months ago, as mentioned by the Minister, it appears that the perpetrators of illegal moneylending are having a field day and have inflicted injuries on some of the victims. So it is thus clear that loansharking and thuggery go hand in hand. What I would like to know from the Minister is whether the current situation is now under control and whether the measures taken by the Police have been effective in controlling this problem because we make no apology for taking or ensuring effective laws are legislated to protect hapless victims.

Sir, I am glad that the proposed amendments now make offences under the Moneylenders Act seizable and non-bailable. I am confident that these new provisions will act as an effective deterrent to curb such criminal activities.

Sir, once again, I lend my wholehearted support to this Bill.

Mr Chiam See Tong: Sir, I give my support to the Moneylenders (Amendment) Bill.

We all, as MPs, know of the problem of loansharks who have harassed our constituents and we have seen them sitting around in the coffeeshops in our constituencies. They have caused a lot of social problems, not only mistaken identity, as has been mentioned by another speaker, but also the breaking up of families. Many divorces are, in fact, caused by harassment of the loansharks. The wife could not take it any more and she said, "I better get away from the husband."

In my view, one of the root causes of moneylending is gambling. Gambling is prevalent in Singapore. What has happened is that many men, who want to get rich quick, indulge in gambling. And gambling seems to be very easily available. What has happened is that he is in debt because of his gambling activities, and he goes to loanshark A. He borrows money from loanshark A, who might charge him interest as high as 20% a month, and soon he will find that he is greatly indebted to loanshark A. He has got no other means of getting money. He has got to go to loanshark B to get money to pay loanshark A. And sometimes it even goes down the line to loanshark C, and he is owing so much money that he is really in great trouble. So it would appear to me that one of the causes of this moneylending problem and all the harassment that goes with it is, in fact, gambling which is prevalent in Singapore. If you really want to solve this moneylending problem, perhaps, we should tackle its root cause.

Prof. Jayakumar: Mr Speaker, Sir, in answer to Dr Arthur Beng's question, it really boils down to how we draft the legislation. The approach we have taken is to craft the amendments to deal with the specific problems. We could have, of course, taken a broader approach to deal with damage to common property, and so on, and that will widen the ambit of the legislation. But let me say that it does not follow that where damage is caused to other properties, particularly public property, there is no remedy at all. It would be an offence under the Penal Code or the Vandalism Act and appropriate actions can be taken. But we decided to craft the amendments to deal with the specific problems covered by the Moneylenders Act.

Mr Zulkifli asked what is the current assessment. Basically, it depends on Parliament and the Police to convey the correct signals to the trouble-makers involved. The passage of this Bill will give unequivocal signal that such acts of hooliganism, thuggishness and gangsterism will not be tolerated. And the Commissioner for Police, I am sure Members have read, has come out very clearly, speaking on behalf of the entire Police Force, that whether it is moneylending, granny-bashing, road bullies, the Police will not tolerate such acts of criminal intimidation. So I think the signal is clear. In fact, the Police have told me that even when the Bill was introduced in Parliament, the fact of its introduction already has a dampening effect on the problems which I have just outlined. So let us hope that the passage of this Bill and the subsequent enforcement will have a further effective deterrent value.

On Mr Chiam's point, maybe he is right that gambling is one of the causes. But having spoken to the Director of CID, it is not the only cause. There is a wide variety of reasons why people may resort to illegal moneylenders. He said that men gamble and wives desert. There are also women who gamble and cause family savings to go away. I am not sure it is so simplistic that if we did away with gambling, if it can be done away with at all, we will not have illegal moneylenders. I think the problem will be with us for some time and it is incumbent upon us to craft legislative and enforcement measures to contain the problem.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Prof. S. Jayakumar].

Bill considered in Committee; reported without amendment; read a Third time and passed.