Posted on by Kit

RM4.6 billion PKFZ scandal – 5 questions Ong Tee Keat must now answer

I welcome the undertaking by the Transport Minister, Datuk Ong Tee Keat to give a full report on the RM4.6 billion Port Klang Free Zone (PKFZ) bailout scandal, as during the last parliamentary meeting, his predecessor Datuk Chan Kong Choy was “on the run” to evade accountability and responsibility on the many questions raised on the issue.

There are at least five questions about the RM4.6 billion PKFZ scandal which cry out for answer, and which have now become the responsibility of the new Transport Minister, viz:

1. Was it true that when the Port Klang Authority and the Transport Ministry insisted on buying the 1,000 acres of Pulau Indah land for PKFZ at RM25 psf on a “willing buyer, willing seller” basis, in the face of strong objection by the Attorney-General’s Chambers and the Treasury which had recommended that the land be acquired at RM10 psf, the Cabinet had given its approval subject to two conditions: (i) categorical assurance by the Transport Minister that the PKFZ proposal was feasible and self-financing and would not require any public funding; and (ii) that every RM100 million variation in the development costs of PKFZ would require prior Cabinet approval.

2. In the event, the first condition was breached when the PKFZ project ballooned from RM1.1 billion to RM4.6 billion requiring government intervention and bailout while the second condition was breached with the original PKFZ development costs of RM400 million ballooning to RM2.8 billion without any prior Cabinet approval ever sought for every RM100 million increase in development costs.

3. The Transport Minister had unlawfully issued four Letters of Support to Kuala Dimensi Sdn. Bhd (KDSB), the PKFZ turnkey contractor — to raise RM4 billion bonds, which were regarded as government guarantees by the market. The Transport Minister had no such powers to issue financial guarantees committing the government, as it could only be issued by the Finance Minister and only after Cabinet approval. The first Letter of Support was issued by the former Transport Minister, Tun Dr. Ling Liong Sik on May 28, 2003, which was Liong Sik’s last day as Transport Minister while the other three were issued by Kong Choy.

4. Whether it wasn’t true that in recognition that the four unlawful “Letters of Support” of the Transport Minister had nonetheless given implicit government guarantee to the market that the Cabinet had in middle of last year gave retrospective approval for the unlawful and unauthorized four Letters of Support by the Transport Ministers in the past four years creating RM4.6 billion liability for the government in the bailout of PKFZ.

5. Why no action had been taken against the two previous Transport Ministers, both Liong Sik and Kong Choy, as well as the government officials responsible for the unlawful issue of the four “Letters of Support” – getting the government embroiled in the RM4.6 billion PKFZ scandal?

I will again be demanding for full government accountability and responsibility for the RM4.6 billion PKFZ bailout scandal.
I have submitted the following question on the PKFZ scandal for the first meeting of the 12th Parliament, beginning on April 28, 2008:

“To ask the Minister for Transport to fully explain the RM4.6 billion Port Klang Free Zone (PKFZ) bailout scandal, i.e. on its viability, history of impropriety of land transactions, illegal issue of Letters of Support, Cabinet bailout, retrospective ratification of past illegal decisions by previous Transport Ministers.”

126 Replies to “RM4.6 billion PKFZ scandal – 5 questions Ong Tee Keat must now answer”

  1. That amount is not small, it is enough to build the 2nd bridge for Penang. Why federal govt. willing to bailout PKFZ instead of bail out Rakyat Penang? Or at least, subsidize the Rakyat to use premium petrol at cheaper cost.

  2. Before OTK announces all full details of the hanky panky inside RKFZ, the “corrupt hidden hand” within BN will shut his mouth up. Under the hypocrite PM, nothing is clean, transparent, and fully accountable. The only way to clean up the government and for the country to move forward and compete globally is to throw BN totally out in GE13 and let Rakatan Rakat to take over the federal government.

  3. Correct, correct, correct YB Kit.

    “Retrospective ratification of past illegal decisions by previous Transport Ministers” only serves as an encouraging precedent for present and future minisiters of any ministry to continue making illegal (ultra vires) decisions with impunity to the detriment of government’s credibility, depletion of national coffers and subversion of rakyat’s interest.

    Datuk Ong Tee Kiat, we await with abated breath for you to give a full report on the RM4.6 billion Port Klang Free Zone (PKFZ).

  4. We should also ask the [deleted] on the current leaders even after he has retired as a leader and refuse to retire from politics.

    I think the high handed Dr. M has alot to do with the scandals and corruption that ruined our development and recial harmony.

    He and his party had used segregation tactics and played the racial issues to promote themselves and gained power.

  6. YB Lim,

    Of course Datuk Ong Tee Kiat is more than happy to give a full report on the PKFZ issue. He just took over & have nothing to do with it. I am more interested in the 5th question “Why no action taken against 2 previous Transport Minister?”.
    The Pakatan Rakyat need to form a new govt in order to bring the 2 previous Transport Minister to justice !!!!

  7. “Why no action taken against 2 previous Transport Minister?”.
    ===============================================

    If you still think that action will be taken against those involved, you must be DREAMING. Taking action against true wrongdoers will NEVER HAPPEN under the corrupt BN government. PERIOD.

  9. What do Sdr. Lim think about the math for Putrajaya civil servant housing as announced by Chief Secretary Sidek Hassan over RM250,000 per apartment/house and not enough people to fill them?

    It smells like another PKFZ????

  10. Thank you YB Lim,

    RM4.6 billion is a huge sum. Every Malaysian now waiting to hear from BN how such scandal can happen for so many years since Ling Leong Sik days and BN keeping mum and where the money gone now?

    26 million Malaysians each paying RM176.92 to whoever bank accounts and where has it gone now?! Should all 26 million Malaysians just forget about the history and let it goes since past is past. Nonsense! History will repeat itself if thing gets brush aside and ignore.

    Ling Leong Sik has to be answerable since he is still alive and nobody know the history.

    Thanks YB Lim and DAP, thanks for the hard work, great job. 26 million Malaysians will be greatful if few fellos can be bought to justice and return their ill gotten gains back to the people.

  11. Ong Tee Keat is going to tell us that this is in fact not a bailout, because investors are lining up in droves to move into the properties that are already built. He will tell you that by 2050, the Free Trade Zone will be fully occupied, so to say that the RM 4.6 billion is a bailout is wrong. It should be called a prudent investment by the government.

    We have to go beyond the bailout. We have to unearth the transactions that led to the amount being spent – the land deals, the construction contracts, the maintenance contracts. Only then can we know who were the true beneficiaries of this deal.

  13. From the looks of things happening after 1 month period after the 12th GE, its seems that there is no other way but to rule the country by means of getting anther 30+ MPs from BN to jump over.

    If BN is allowed to rule on, there will be lots of cover ups and more arrogance on the part of the unrepentent Ministers of BN like Les…Azalina, Orang Kena Cucuk (OKC) and others.

    OTK can shout out his voice but then there will be a hidden hand to shut him up on PKFZ and we will only get just the surface explanations and then its….ZZZZzzzzzzzzzzz and all kins of reasons again….

    PR & Rakyat have no choices but to turn over the Govt to PR and then get on with the ruling that rakyat wants. Then clean out the under carpet rubbish and bring all crooks to book and if there is a need to build a bigger jail to put the crooks there, by all means build it.

    PR, pls do not hesitate to get the 30+ MPs to cross over and then we shall show BN why rakyat hated u so much.

  17. Kit,

    While you are at it, can you please ask the Home Ministry, IGP, AG and EC Chairman, where are those goons who smuggled in the indelible ink and planned to sabotage the general elections?

    It has been more then a month and we have not heard a single person being hauled to court or being charged. What happened? Why pin drop silence from the AG and IGP who was so quick to stand beside the EC Chairman and make the allegation.

    We the rakyat DEMAND to know what happened!

  19. YB Lim KS,

    This subject never disappear. It was *** Investment Bank that arranged for the Bond. ****IB received that “Letter of Support” from Port Klang and based on that letter, RAM gave it AAA rating.

    Your trail should start with this **** bank. All bond papers are submitted to the SC. It is not difficult to check YB. This parliament session, push for this. There are 82 of you there.

    YB Lim, check:
    1. Is there “ultra vires” in accepting the”letter of support” from a quasi body, set up under enactment?
    (Jeffrey, your opinion please). The bank must be made responsible.
    2. What was the original term of the release of the Bond money? A copy of these details should be with the SC. Where are the last few years audit reports/bank statements?

    No need for the ACA to check all these commercial transactions. Documents from Investment Bank, SC and Audited Report should be enough.

    Since we are on this subject, YB Lim, don’t forget the collapse of the RM4.0m building in Belum.

  21. We will wait for the “report” promised by Ong Tee Kiat and see what is inside, whether it is another “whitewash” as before.

    Whether he is going to recommend actions against the wrong doers in his report, or whether his report will just be another “statement of intent” as is the norm of the government.

    Not many people holds much hope of seeing any real actions as far as the “report” by Ong Tee Kiat is concerned.

  22. You know why BN lost the gen election? Because when a report on govt matters sgowed corruption or scandal, BN took no actions. Now when Ong Tee Kiat gives a true report, BN takes no action, that will be their demise in the next election.

  23. PFKZ is the mother of all corruptions.

    Rakyat seeking to hear the answer.

    Please dig further and get to the bottom of the scandal and expose those PENGKIANAT2.

    4.6 billion part of some Utar champion retire fund may be.

    Too embarass to call ourselves Malaysians if we let it goes.

    4.6 BILLION RINGGIT, can we forgive and forget?!

    For the sake of the country and future generation dig futher and expose the TRAITORS.

  24. 4.6 billion and the previous Transport Minister just quietly sneak out without explaining, reasons given ill health?!?

    We want an answer, not only that please let him accountable for it.
    If no actions taken, can we all decide not to pay our Tax?

    I am sure each and everyone of us cursing the govt each time we file our tax during this time of the year. Here we work so hard n pay tax there we have corrupted ministers, or not spending our money wisely like sending out a space tourist.

  25. Oknyua,

    Re your question – “Is there “ultra vires” in accepting the “letter of support” from a quasi body, set up under enactment?”

    From what we know the “Letters of Support” were allegedly issued by the Transport Ministry to PKFZ turnkey contractor to raise RM4 billion bonds rated triple “A” by RAM from the market structured by investment bank (true???). They were also allegedly “ultra vires” (ie in excess of authority) as, we were informed, that the Ministry of Finance (“MOF”) had to prior authorise such “Letters of Support” if they were intended as a guarantee to commit the Government of Malaysia financially in such a scale, and such prior approval by MOF was not given at the time of issuance of “Letters of Support”. That being the case, of course it is a strong point to ask whether RAM was right to award AAA before checking the facts of MOF’s support. Also whether the market (ie the bond holders or their financial advisor and the financing banks) should be allowed to call on the Letters of Support, as if they were a guarantee or indemnity, when they or their legal advisors knew or at least ought reasonably to know or at least to enquire if MOF had given approval. To the extent that they failed to do so, an argument may be made out that they could not rely on the Letters of Support as recourse.

    As I understand it the above questions become academic because in spite of the ultra vires nature of the Letters of Support’s issuance, the Government of Malaysia, in the interest of credibility or for other reasons better known to the decision makers, subsequently elected to ratify ie adopt these Letters of Support issued ultra vires as if they were originally intra vires (ie within authority and also approved by MOF), so what can we say now??? You can’t deprive the Market the benefit of the Letters of Support that government, knowing all the facts of their being ultra vires, elected to ratify and confirm.

    At most we can only ask for accountability – why adopt and ratify ultra vires acts of two Transport Ministers issuing the Letters of Support, thereby increasing exposure to government to an aggregate of RM4.6 billion???

    I do agree with you that there should be an audit and investigation but the problem is who has the expertise and impartiality to do it??? The ACA may not have sufficient personnel having an integrated grasp of such a transaction. The proper investigating agency ought to be the Securities Commission (SC) but the problem where it comes to the raising of RM4 billion bonds by PKFZ turnkey contractor, the SC’s approval must have already been earlier given so could the SC become an independent investigator?

    I think we need a high-powered Royal Commission comprising reputable auditors, accountants, corporate and banking lawyers of integrity and impartiality to get to the bottom of this – provided there is political will to form it. How could we, when the Royal Commission on Lingam Video clip still have not completed findings and made suggestions???

  27. Hi,

    This site given me a feel of eyes open. RM4.6 Billion!!!!

    Frankly, I’m a simple person , just wanted to know Kuala Dimensi Sdn. Bhd (KDSB) is belonged to who? Or rather who the culprit related to?

  31. To ric23_my i think YB LKS should apology to you instead of Teng for not appointing you Selangor Exco.

    I agreed with max2811 suggestion kind of creative. Sorry to have offended you but do you think you piss many of us here trying to move on and start contributing to a better Malaysia.

    This 46 billions are easily approved by Pak Lah, when Lim Guan Eng proposed federal govt. to give 3.5 billions, what did Pak Lah told him? and the Penangites? By the way, I’ve heard news from YB LGE saying the state funds has been reduced more than 50% since November last year, is this true and who did that? without funds from federal, definitely the Gerakan Govt. will resort to more violence lootings and raping the syndicates.

    In Penang there are many brothels and nightspot owed by them, the syndicate boss also hate the previous Gerakan govt. keep asking for protection money without fulfilling their promises.

  32. Ai yoh ric23_my,

    You not sian meh? The answer was given by LKS and also Teng liao lah. Pls dont talk abt that liao lah…move on….Teng is going to be the State Speaker on April 22.

    I was not happy too but we have to move on aand after reading Teng’s blog, I am satisfied with his explanation and I trully respect him for his gentleman behaviour and his thinking on Macro.

    Rest your case ok? Don’t be so “cheong hey” lah

  33. Wow! RM4.6billion…..who ask we all to pay so much tax??!!!

    I want to cry lah now!!

    How many children, atuk, nenek, flood victims, police salary and the rakyat in general can benefit?!! Aiyoh!!!

    From this year onwards, don’t pay so much to the syaitan government!!!

    Come to me, I do tax planning for orang perseorangan, syarikat berhad, perkongsian, milikan tunggal…..plan your tax so pay less!!

    But if Pakatan Rakyat comes into power we pay extra…nevermind!

  34. Dear ric23_my actually got 2 roles, become State Exco or State Speaker, i think both are acceptable as long as it brings change and benefit to the rakyat, we should be thankful to both of them to accept such arrangement. I hope after this you can go have a cold shower, and have a pretty girl to go karaoke. Now is 3 (me, chanjoe, max2811) -1 (you). We are hoping you can move on.

  35. Someone help to ask the policemen come look at this forum here I think they will cry also……..

    They put their life in the line of fire everyday for meagre incomes so that their “masters” can have a go at the BLOOD MONEY of the Rakyat!!!!

    the funds can be used to improve their living conditions in the police squatters, give them yearly bonus, allowance for late nite shifts, better safety equipments, & etc. & etc…….

    Now is 21st century, police also have human rights, don’t think like we are still in post-Merdeka era!!

    What price of living now in this world?!!

    Wake up kawan kawan polis kita, jangan terus tengok wayang sandiwara kerajaan syaitan ini!!

    Kita ada ingat sama kamu semua, sebab kamu rakyat Malaysia juga, itu syaitan syaitan semua ada ingat sama awak kah?

    Pass this message to your police friends if possible, thank you.

  36. To all of DAP Putras here …

    Ong Tee Kiat will answer u all with this ….

    “The previous 2 transport ministers alredi clearly stated that BN members all accepted for the answer of this RM 4.6 billion … please rest the case or u bang ur ball in toilet”

    will u accept?

  37. ric23,

    u believed what the syaitans say to you?

    But of course, come to think of it, what can ‘we’ do even if its a lie, we still have to swallow it, we are just normal citizens, rite?!

    We have been swallowing for a long time, I hope u realize & understand my fren…

    don’t let the devil lead you astray further!

  38. Can’t the MP called the ACA to report since the public audit committee has prove irregularity? Just wonder can’t interogate the ACA department if the result is not satisfactory.

    If the bloggers has donated money to support DAP to deny BN 2/3 majority, the people could support even RCI. Go for it..

    Wait for another BN’s member to report the truth? It is like challenge the boss, waiting to be sack?

  40. Jeffrey, I came across this because sometimes back I was headhunted by one Invest Bank and in one of the “coffee talk,” one manager bragged that they were the one that handled the North Port case. I mentioned it’s not doing well. His replied, “It’s all right, we’ll get more work from it.” True, that’s our standard answer, not that he pretended to be smart.

    It was in this conversation that he bragged about the “Letter of Support”, where RAM considered this as tantamount to a gov’t project. I did not sight the said letter; whether it was Letter of Support, Letter of Guarantee, Letter of Awareness or Letter of Undertaking. But the triple A is right (based on this manager’s brag). The fact it is considered a “gov’t project” is already improper because the beneficiary in this case is a third party, a private limited company. That is straight enough.

    Yes, the release of the documents need the act of parliament or RC, I think, but to trace details therein, no, it’s not that difficult. The purpose of the Bond must be specified clearly, and the manner of the release, to whom and when, must be mentioned in the paper itself – in fact in the few front pages itself.

    The SC, I think, cannot be brought in, as their agreement to the issuance of the bond does not tantamount to the approval or implementation of contents therein. That has been SC’s policy all the while.

  41. Guys:

    It was Malaysia Rating Agency that gave the AAA rating, not RAM. Who said the bonds were ultra vires ? The legal opinions (from two of the biggest firms in town) said that the letters of support issued by MOT and acknowledged by MOF, represent the full faith and credit of the government.

  42. Speaking from Rakyat’s perspective, I DEMAND a FULL report and an IMMEDIATE explanation for the $4.6 Billion spent!

    $4.6 Billion cannot dissappear “just like that”! HEADS MUST ROLL!

  43. RM4.6b is a huge sum and full accountability must be sought to have closure.

    But so is lives lost. All the money in the world cannot pay for human lives needlessly lost. We now have another express bus accident and people have died and been seriously injured. Again the same old sad tale emerges – 52 summonses, newly licensed bus driver etc. etc. The previous Transport Minister had promised stern action will be taken. The police, JPJ etc. etc. all jumped on the bandwagon and promised heaven and earth. But typical with all Malaysian scandals, when the hue and cry dies down, so do these Govt worms all crawled back into their holes and hibernate until the next accident.

    I wonder if there are legal avenues for the victims to sue those authorities responsible for their gross negligences to tackle these problems. Personally I am sick of the apathetic attitude of the ministers in charge and the civil servants they supervised. I suppose they will only wake up if one day one of their own loved ones is the victim. Otherwise they do not feel the pain of the victims’ families.

  45. Hi godfather,

    May I know what is RAM? And what is MOT? Sorry I’m just a normal citizen whom don’t about all these abbreviations. If the bond been acknowledged by MOF means TDM signed on the document also, right?

    That is getting interest.

    Thanks for your valuable information.

  46. No point to chopped the heads since those suckers have already retired. Freeze and confisticate their local and overseas assets, strips off their fancy titles and put them into the lock up. Let them realised 26 million Malaysians suffered and paid for their misdeeds, so they have to return all back to the country. Period!

    These suckers are pretty lucky living in Malaysia soil. Can retired happily ever after with full of ‘honour’ and ‘respect’. In Singapore or China they are considered gone case, treated as scumbag worst than bank robbers.

  47. kingkenny,

    for sure i wont believe wat MCA said … wat i wanted to say is if we want someone to practice something, we should practice it also …

    when we keep asking MCA to answer some question that we are not satisfy with .. we labeled us as hero … But when other ppl question us something, we dont even want to answer and label the ppl who are asking as troublesome …

    this is a behaviour of Putra … and very obvious there are so many DAP Putras here …

  48. Bobster, the problem is majority of this 26 millions Malaysian are brainwashed by the media, press and radio, thanks god, a few of them realized the power of blogging.

    Look at Penang Bus companies compare to Rapid Penang. Where Rapid Penang get the fund to buy new buses whereas those bus companies who operated bus route since Lim Chong Eu time are still using the same old bus, just refurbished it, some even got air conditioned installed, engines changes. Seriously private bus companies compare to govt. bus companies which one is better?

    They are using that to bait the Rakyat to vote for BN. They will take RM 100 from rakyat, raise capital by borrowing another RM 200, and then start earning from Rakyat. Well, that’s how Rapid Penang can one shot by so many new buses & hiring drivers, all these are arranged & approved by Pak Lah & Tsu Koon.

  49. Godfather is right that the rating agency is not RAM but Malaysia Rating Corporation Bhd (“MARC”).

    Nobody contends that the bonds issued by the turnkey contractor – Kuala Dimensi Sdn Bhd (KDSB) – were ultra vires, the contention being that the letters of support issued by Ministry of Transport in their support were not that of the Ministry of Finance (MOF), and hence the letters of support were ultra vires, in excess of authority of Minister of Transport to issue them.

    Here however Godfather said that “the legal opinions (from two of the biggest firms in town) said that the letters of support issued by MOT and acknowledged by MOF, represent the full faith and credit of the government”.

    Then there is a serious dispute of fact here YB Kit because if what Godfather said is true, the letters were acknowledged by MOF which could be argued as good as MOF’s directly issuing them!

    I mean if MOF did not approve, why acknowledge without further confirming that it did not approve the issuance by Ministry of Transport, another agency/ministry of the Government of Malaysia?

    Everybody then knew that the development of PKFZ was in line with the Government’s stated policy to develop Port Klang as a regional distribution hub as well as a commercial, industrial and logistics center.

  50. I don’t give a damp this OTK can give an honest clean account of PKFZ scandal. What we really need is an independent inquiry. And also, prevent those bastards from leaving the country before the case/inquiry is over.
    Correct, correct, correct, PKFZ is a scandal!

  51. After YB Datuk Ong TK given his full report on this RM4.6b fiasco, what will happen then ?

    Most probably a lot of people will come out and say : well, I cannot remember now, its looks and sounds like me having a hand on this but its not me…..I have nothing to do with this. Everything that have been done is in accordance to procedures. You people who are accusing me on this and that must be mad …Yeah…correct..correct..correct…..

  52. Uncle Lim,

    even that most of the ppl dun like MCA and know they are lying … AT LEAST they give a statement that they are going to give a report on this RM4.6 billion issue (most probably the report will be misleading and not reliable) … further more this issue will going to affect reputation of many ppl … but at least we are inform with such a big issue …

    for selangor issue, so small matter … but until now, DAP leaders playing hide and seek games … and even Lim Guang Eng have to lie on this and push the responsibility to Mentri Besar Selangor …

    This is not a good manner of a leader, u should face it instead of just asking ppl dun ask and rest the case …

  54. New Cabinet:

    Prime Minister – Anwar

    Deputy Prime Minister – Lim Kit Siang

    Culture Minister – Farish Noor

    Defence Minister –

    Education Minister – Nga Kor Ming

    Environment Minister – Teresa Kok

    Finance Minister – Tony Pua

    Foreign Minister – Ramasamy

    Health Minister –

    Home Minister – Ronnie Liu

    Information Minister – Jeff Ooi

    Law Minister – Teng Chang Khim

    Manpower Minister –

    Sports Minister –

    Technology Minister –

    Trade Minister –

    Transport Minister – Liew Chin Tong

    (Penang Chief Minister – Lim Guan Eng)

  56. aston,

    the new cabinet will look like this:

    Prime Minister – Nurul
    Deputy Prime Minister – Ean Yong
    Education Minister – Ramasamy
    Finance Minister – Ronnie Liu

    And that time u better dun ask why … coz DAP leader implement favourism … not by experience and achievement …

    and u cannot ask why also for the formation, even ur brain appear many question marks …

  58. “Why no action taken against 2 previous Transport Minister?”.
    ======
    Because the ACA and AG are there to protect them. Don’t you know the entire government machinery is there to protect BN leaders?
    You think they care about the people’s interests?

  59. If MOF gave consent to MOT’s letters, the only question to pursue is the disbursement. This is difficult to trace; there are more than one ways to hide.

    In fact I think if MOF consented, YB Lim, you have a tough case to pursue. Ong TK’s revelation might just end this.

  60. Hi Jeffrey,

    I’m a normal citizen of the country. Think your views are depth enough to be a politician or you are a politician which I don’t know.

    After reading all comments & replies of bloggers felt that you are the best, think got to learn from you in the near future.

  61. A full report needs input from all but not limited to the following:
    Tun M
    Ministry of Finance
    Ministry of Trade
    Land Office
    Local Authority for water, electricity and telecoms
    Tun Ling LS
    Datuk Chan KC
    Port Klang Authority
    Top Officials from PKFZ

    All documentation, correspondences, files, specifications,drawings, photographs, Bills of Quantities, etc need to be available.

    This commission would have plenty to do and need to start work immediately so that all information would still be available.

  62. Jeffrey/Godfather,

    Don’t know the facts of the case but certainly it is not the practice of the Treasury to issue guarantees for this kind of transaction. Guarantees are issued to help the country raise funds in the foreign capital markets.

    Anything less than a guarantee is not worth the paper it is written on. I would advise my client never to accept anything less than a guarantee. Letters of Support?? Wassat?? It is like somebody saying he is familiar with the facts and comfortable with them.

    In the case of a company issuing its guarantee, you need to get a copy of the company resolution duly certified by its company secretary, and a copy of the company articles or memorandum of association. Apart from that and legally speaking you are not required to go behind the transaction to confirm if the company guarantee is in order. The doctrine of ultra vires only works so far.

  63. Aiya, ric23_my, you still with your “DAP putra” theory… ah ?

    Read this, http://www.malaysiakini.com/news/81114

    See Mr Ronnie Liu reply on the Teng issue.

    Yes, everybody recognise Teng’s contributions, but DAP is not the majority winning party in the Selangor coalition, so they have to make do with 3 exco seats, even losing the Deputy MB post (technically not losing it, since there is no Deputy MB post to begin with).

    If you still wanna support Teng, support him to be the Speaker of the State Assembly lah, this position is rank as #2 after the MB, even higher than excos, with 25 people reporting to him…

    If you want every DAP rep to get exco seat, then make sure next election, vote them in.

    Don’t oppose for opposing sake, have some substance lah.

  64. At times, it is very hard to please everybody! Not say it’s hard but it is impossible.

    As long as the oppositions are rakyat oriented, then all should be fine. But come to it, if the PR are Rakyat oriented, not all will be happy also…

    xD

  66. Can we all give the new Minister of MOT a chance to ‘explain’ the truth of PKFZ. Who knows, maybe AAB had decided to let the cat out of the bag, after so many salvoes from TDM, who, after all, was the then MOF. At this amount of money, even LLS didnot have the bearings to move it without the okay from TDM. As indicated the first payment amounted to $1.85 billion for the land, though the original purchase price was just $0.261 billion, a gain of some $1.6 billions !!! Of course on papers, all the monies were paid to the Dimensi Company. An independent audit of the constructions made within the Zone would give us a proper picture of the situation. Would the new Minister have to make the report in the Parliament? I hope so.

  68. 1. We are all well aware of the UMNO Political Hegemony as been voiced out by YB Lim Kit Siang

    2. MCA is a highly marginalised component party of BN

    3. The amount involved is so significant, MCA is definitely the beneficiary in view of 1) and 2) above

    4. OTK is from MCA.

    So do you think OTK dare to do something that will affect the big boss UMNO?

    If is superflous to believe all the truth to come out of this scandal unless OTK is one of those MP that has agreed to cross over to Pakatan Rakyat.

  70. To Kickbutt:

    You’re probably right – Ministry of Finance (Treasury) or MOF does not issue normally issue guarantees for this kind of transaction.

    That’s why Ministry of Transport (“MOT”) issued “Letters of Support” for Bonds/Commercial Papers/Medium Term Notes (CP/MTN) issued by turnkey contractor, Kuala Dimensi Sdn Bhd (KDSB).

    However description or caption of “Letters of Support” does not make it, in substance, more of comfort and less a guarantee if their contents guaranteed bonds explicitly. Right?

    So Government of Malaysia (“GOM”) faced dilemma. MOT is still an arm or ministry of GOM and hence if GOM does not honour “letters of Support” (couched in terms of guarantee) on grounds of technicalities that MOF did not issue them (even when or if Godfather was right that MOF had notice and “acknowledged them) then this would impair GOM’s credibility and how others, especially investors, evaluate sovereign risks in this country. This is especially so when PKFZ project was known to all in market to be TDM’s government’s policy to develop Port Klang as a regional distribution hub and commercial, industrial and logistics centre. So GOM no choice, ratified everything and gave funding of up to RM4.63 billion in the form of a soft loan to KDSB.

    To oknyua:

    The problem is neither bank attending corporate finance nor even disbursements: there’s mechanism of escrow and disbursement accounts etc monitored by banks for payments to KDSB against Notice of Payment supported by documentary evidence on works done, certified by independent consultants and acknowledged by Port Klang Authority.

    For suspicions of wrongdoing or conflicts of interest, one has to query and investigate people behind the various parties and companies and inflated values of the transactions.

    As to the reasons why such a mega project is not viable and requires bail out, I guess they ought to be similar reasons behind many other failed mega projects during TDM’s time.

  71. ‘Unviability’ (if there’s such a word) for mega projects is always same story : no proper feasibility study, no or insufficient market demand, gross mismanagment, creative accounting, conflicts of interest and too many rent seekers in between having their cuts and hence costs over runs, inflation of values, and nothing spilled because everybody important is holding everybody else, with all guilty fingers in the pie etc

  72. Don’t put too much faith into rating agencies.
    In the book called “Infectious Greed” by a lawyer, he describes the incestous relationships between US investment bankers, politicians and rating agencies.

    I suspect that once the phrase “government supported project” is heard, that magic phrase “SEMUA-NYA OK” will be echoed.

  73. u knw how our leaders work rite?….always ask for commissions 1st.its been becoming a norm and “rights” for our leaders to hv this korek korek habit.after deducting the commissions then abandon project or either ask some [deleted] to bail them out again.how much do u think whenever a project is announced these [deleted] will korek fr thr even b4 any of the projects ever take off.
    aaahhh…..full report on the pkfz…hope lah.all fr bollywood and hollywood.dun ever expect to see an honest minister fr the government.all the honest ones hv or will all be detained under isa.

  74. “..Cabinet had given its approval subject to two conditions..” KIT

    The Board of Directors of a Company ratifying the financial feasibility of a project?

    Is that what the Malaysian government has come down to? The business of the government is to govern and not to do business! This was the Tunku-Siew Sin doctrine until Mahathir came along and introduced Malaysia Inc. and made himself first the CEO and later Chairman.

  77. ///Is that what the Malaysian government has come down to? The business of the government is to govern and not to do business! This was the Tunku-Siew Sin doctrine until Mahathir came along and introduced Malaysia Inc. and made himself first the CEO and later Chairman/// – Kickbutt.

    Malaysia Inc. unlike normal corporations is not subject to company laws’ safeguards against breach of directors fiduciary duties, secret profits, conflicts of interest, disclosure and minority oppression….There’s also no oversight by any regulator. “Shareholders” are always taken for a ride. Even in banking, there is Banking & Financial Institution Act to take to task bank executives who lend beyond their designated approving authorities and limits but not the directors (ministers) of Malaysia Inc.

    That is why to prevent innate human propensity to abuse power and self aggrandize, there should be institutional check and balance as regards political and social governance structured around broad and general “separations” of:-

    · Government from business;

    · Religion from government;

    · Powers between legislative, executive and judicial branches – and fifth estate (media);

    · Private morality from public morality; &

    · Morals from criminal laws.

  79. We must not back down from this one and pursue the matter to the end. Criminals must be brought to justice. PKFZ is a desert even now. What has the government done to encourage investment into the area? With that kind of money we could have abolished poverty immediately and NEP will no longer be an issue!

  80. In respond to Toyol statement.

    “Criminals must be brought to justice.”

    Problem is the current Malaysia, if you’ve money & authority you can easily buy justice.

    Taib can easily said those millionth of Australians dollar are his pocket money.

    Why when own government buy subs & jets must give millionth of commission to Razak, who is Razak is he a Menteri Besar, Prime Minister, or some kind of Minister? Our country is so rich that it has to award millionth of commission to third party?

    Yesterday news, further increase noodles etc. Any reaction?

  81. It should not be too difficult to get a copy of the prospectus for the bonds, which would be required in the first instance to be lodged with and approved by the Securities Commission. Then we can see for ourselves the “backdoor” guarantee that allows MARC to give a AAA rating on the bonds.

    It doesn’t need an explicit federal government guarantee to allow rating agencies to apply the AAA rating. For instance, the NS Expressway has an implicit government guarantee that says that any shortfall in revenues will be topped up by the government. The KLIA Express and Tanjung Pelepas port have provisions in their debt that if they ever default, the government will take over the debt obligations.

    In this case, the bonds are placed with the EPF, so to argue that there is illegality involved would mean that the depositors of the EPF could be at risk.

  82. How do 6 person knew RM3.5 million neatly packed and transferred out from KLIA Sepang and there is no guard to escort such huge sum?

    KLIA is the safest airport? No guard at all
    6 hurt in KLIA shootout, robbers get away with RM3.5m

  83. Look at the promoters of PKFA and how MCA backed them all the way via their Minister of Transport. How can the lawyers in town gave a professional opinion that the Letter of Support is honourable and good without going thru that with a fine comb? In essence, the whole project has the support of the Government.
    No, YB Ong hands will be tied. Given the network of deceit, there will be no comission to expose the perpetrators. In any event, they cant afford it as the perpetrators are linked to the inner circle of the corridors of power. this scandal will only see “daylight” if there is a change of Government. Period.

  84. Might be RCI is the solution. You guess there will someone to admit ” yes , I did it” when the corruption invloved BIllion? Probably the one will dispear from the world before he could say anything.

    The story will be like Lingam case. “I don’t remember” ” This is not my decision”.

    OTK will say ” Please ask MOT” , MOT will say ” please ask MOT” and everyone will be fool around.

    Let see what is the landmark decision on RI on LIngam case.

  85. Correction
    Might be RCI is the only solution. You guess if there will be someone to admit ” yes , I did it” when the corruption invloved Billion? Probably the person will disappear from the world before he could say anything.

  86. If Lingam case does not bring justice and punish all those related culprit including their cronies , then the truth on PKFZ will be meaniningless.

    The next will be “Will BN be relegated to the opposition? ” as reported by MalaysiaToday for the new government to take stern action.

  87. My contention, Jeffrey, is not so much on the details of the case at this point. I am, you forgive me YB Lim Kit Siang, a little disappoint with YB’s approach to this issue of interest.

    YB, you are no longer the helpless, toothless apposition anymore. There are 82 (hopefully 83 soon) of you in parliament. You have to change you game plan, because your aim is not to highlight issues anymore. You must also give an alternative solution.

    NKFZ cannot embarrass the government anymore, and neither should that be your aim. Instead, compile all the details that you have, arrange them, and make appointment to see Ong TK. From what we know, the present Transport Minister is not one who makes apology for others. If he needs to step on someone’s heads, he would – judging from his previous actions. The fact MCA intends to clean up its image is another added factor. The bottom line is that we want to see a clean Malaysia.

    It for this reason I was keen on the 8th March GE results. In many ways we have achieved substantial results, so now we have to more further, no longer the Mr Opposition, but Mr Alternative Government. If actions to resolve issues to interests are ignored by the BN gov’t, then, and only then should we highlight them. The good people are behind you, YB.

  88. I think they will replied like this,

    It looks like a govt. bailout, sounds like a govt. bailout but it is not a bailout, this is merely a govt. investment.

    Now get over start a new life wait another 5 yrs.

    Poff, RM 4.6 billionth varnished from Malaysian pocket. What can the Ong’s brother do?

  89. Godfather, SC is very secretive about documents, but another copy is with ROC, which should be easier to obtain.

    Another thing, you are saying the bond was taken by EPF? All of it? That reminds me of RM3.20 Time.Com price paid by EPF back then. (Today’s Time.Com is hovering at RM0.50).

  90. Under PDS (private debt securities) guidelines, a copy of the prospectus must be lodged with the SC and with Bank Negara. This document cannot be considered to be under the Official Secrets Act because it is a public document.

    My understanding is that all the bonds were placed with the EPF.

  93. If we look at the ERL, that is another classic example of how the sponsors (YTL) take no risk, and the risks get transferred fully on to the government. The debt is guaranteed by MOF Incorporated, and there is a minimum revenue guarantee by the MOF such that the shareholders will always get their returns. The shareholders get their profits from the construction contracts and from the maintenance contracts.

    They tried to duplicate this formula with the high speed train project between Singapore and KL – with KJ lobbying for YTL. Luckily, common sense prevailed and the deal was shelved.

  96. Among the many leaders in MCA, OTK probably is the cleanest and smartest one.

    Let’s give him a chance to dig the shits out.

    But frankly, before the shits are been digging out, he might be silenced by the “dark force”!

  101. picked from-anilnetto.com

    Abad Naluri chairman quits; game over for Patrick

    Just heard from a reliable source that Dato Sri Kamal Hashim, the chairman of Abad Naluri, has resigned from his position with immediate effect.

    Kamal Hashim is presently the northern region director of The Star, which gave the launch of the PGCC by the prime minister last year prominent coverage.

    It is also believed that the Prime Minister and his family are now distancing themselves from Patrick Lim, whose dealings exposed the BN to stinging criticism in the run-up to the general election – from opposition parties as well as from Mahathir.

    Abad Naluri is the developer of the controversial PGCC project and was supposed to sign an agreement to buy and develop 300 acres of land in Batu Kawan as a replacement race-course for the Penang Turf Club.

    These deals have been shrouded in controversy, and it was widely believed that powerful vested interests were the driving force behind them. In particular, the Penang State Government has been asked to probe deeper and find out how Abad Naluri could end up buying 750 acres of prime land, right next to the site of the proposed second bridge for Penang.

    So who was really behind these land deals? As at October last year, the directors of Abad Naluri were Patrick Lim, Md Isahak bin Md Yusuf, Kamal Mohamed Hashim bin Che Din and Chin Pei Fung.

    While much has been said of Patrick Lim’s interest in Abad Naluri Sdn Bhd, his Taman Equine only has a 25 per cent interest in the firm.

    So who are the other major shareholders of Abad Naluri, which had an issued capital of only RM519,867? A company search revealed that the firm’s other main shareholders were Syed Jalaludin bin Syed Salim (Prof Tan Sri Dato’ Dr) (24 per cent) stake and Aneka Mayang Sdn Bhd (46 per cent). The rest were mainly small Chinese Malaysian shareholders holding 100 shares each.

    Now let’s look at Abad Naluri’s biggest shareholder, Aneka Mayang Sdn Bhd. Surprise, surprise, Aneka Mayang is a RM2 company! One share each is held by, yes, Syed Jalaludin again and the other by Idris bin Denan. Imagine, a RM2 company has a 46 per cent interest in Abad Naluri, which in turn was supposed to undertake the RM25 billion PGCC project! Only in Malaysia…

    Any of these individuals and firms could be proxies for other more powerful interests.

    Now that the end of the PGCC project is nigh, this does not mean we are going to get a People’s Park in Batu Gantong tomorrow.

    For, would you believe it, certain members of the Turf Club are now salivating at the prospect of making a tidy profit from “developing” the Batu Gantung land for private gain.

    A prominent member has circulated a proposal which would involve members buying the 259-acre plot of land from the Turf Club for RM488 million.

    Under the proposal, the members would allocate 180 acres out of the 259 acres for property development. Basically, they want to build 581 bungalows (each 7,000-8,000 sq ft) and sell them to the members at RM100 sq ft. (The Turf Club has 581 members.) They also want to build a further 140 bungalows for sale to the public at RM200 sq ft.

    Incidentally, the market value of the land is now around 250 sq ft.

    Under this proposal, the profit from this property development would be RM115 million, which would be donated to charity. (But the members would already profit from buying the bungalows at a discounted price of only RM100 sg ft, which means each member would in effect make a cool unrealised profit of around RM1 million on top of the RM20,000 they had earlier received.)

    The proposal also involves the members handing over the unused 79 acres as “open space” for a public park to the Penang state government. Wah, so generous! But hang on a minute – this “open space” is actually hill land and cemetery land (which cannot be developed in the first place) for crying out loud. Now I wonder how many people fancy strolling around hill-slopes and tombstones for their leisurely morning and evening walks.

    Imagine, whoever came up with this hare-brained, land-grabbing proposal dares to call it a “win-win situation for all parties concerned”.

    Let’s be clear. The land does not belong to individual Turf Club members so that they can profit from it. It was handed over to the Penang Turf Club by the State in 1935 for recreational use. The only reason we got into this mess is that the previous state government, with the connivance of vested interests, re-zoned this land to “mixed development”. It is time the new state government put a stop to this nonsense of certain quarters eyeing this precious green lung and wanting to “develop” it for personal profit. The land and surrounding areas should remain a heritage enclave and the only way that can happen is if the new state government re-zones the land back to its original status as “recreational”.

    That should keep away the greedy vultures, now circling in the air while eyeing the carcass of the still-born PGCC below.

  103. Would be good to have first Blog Minister when PR take over!

    Another scandal in the pipeline in Putrajaya. BN can’t pay government servants well but can built RM5billion condo project. It will be blown to RM 10billion when every bit & pieces that go into the project are mark-up 2-3x the market price. Another thing not mention…who or which company will be managing the properties & collecting management fees for it? Not mention right?

    Disappointed with YAB OTK remarks today. Thought highly of him at least within the MCA ranks. No report yet (will do own pace & all that arrogance of trademark BN minister) & turn around to criticize YAB LKS. YAB OTK has forgotten it is the Transport Minister job to find the evidence & turn PKFZ around. He has forgotten why the rakyat voted for him. If the opposition were to do it, then we don’t need a Transport Minister like him & he is not doing his job. Talking like PM AAB famous words…”saya akan siasat”. Looks like another false advert by BN-propaganda again. Datuk OTK treating us all like little kindergarten kids.

  105. Pingback: Malaysian Politics » Blog Archive » No police report lodged, never visited PKFZ?

  106. YB, You need to get accountants to do a detailed study of the whole deal. As a whole it may be difficult to catch the culprits. But if you start to zoom in on individual deals, you will see where the excesses are, and where rakyat’s money has been misused.

  107. guys, came across this site. check this out.

    http://malaysianunplug.blogspot.com/2007/08/port-klang-free-zone-pkfz-scandal_1797.html

    The free-trade zone project began as a joint venture between the Port Klang Authority and the promoters of the Jebel Ali Free Trade Zone (Jafza) in 1999 to attract foreign investment and promote the Malaysian port.

    The land from the project belonged to Kuala Dimensi, whose current chairman is UMNO treasurer Datuk Azim Zabidi.

    The company acquired the land in the 1990s for RM96 million, or roughly RM3 per sq ft.

    When the Port Klang Authority proposed to buy the land from Kuala Dimensi, documents reviewed by The Straits Times show that the government body was advised to forcibly purchase the land under the country’s Land Acquisition Act, which meant that the property would have been valued at around RM10 per sq ft.

    But the Port Klang Authority ignored the advice from the government’s chief legal adviser and proceeded to buy the land from Kuala Dimensi in 2002 on a commercial basis, for RM1 billion, or roughly RM25 per sq ft, government documents show.

    The authority also decided to award the now cash-flushed Kuala Dimensi SOLE rights to develop the free-trade zone.

    To fund the development, Kuala Dimensi raised funds through the issue of bonds that received the backing of Malaysia’s Transport Ministry.

    The purchase of even a modest property requires separate lawyers working on behalf of the seller and buyer, each striving to get the best deal for their own clients.

    This was NOT the case with the Port Klang Free Zone (PKFZ), as documents procured by malaysiakini indicate.

    Those parties who were supposed to have acted either in the best interests of the buyer of PKFZ -Port Klang Authority (PKA) – or that of its seller and developer Kuala Dimensi Sdn Bhd (KDSB) – were, in fact, ONE AND THE SAME.

    Consider, for example, the legal firm, Rashid Asari & Co, which had drafted the March 2004 land development agreement between PKA and Kuala Dimensi. The lawyer engaged to draft the agreement works for ‘the other side.’

    PKA appointed Rashid Asari & Co, the firm that was, and remains today, on Kuala Dimensi’s legal panel. Abdul Rashid Asari who heads the legal firm also happens to be the vice-chief of the Kapar Umno division.

  108. What do you think Ong Tee Keat is going to say ? That this was an Ali Baba exercise involving UMNO, MCA and a Sarawakian party ? That the money made from the inflated land deal was earmarked for the March GE, but was instead siphoned into certain UMNOputras’ pockets ?

    Just like Zaid Ibrahim who has been silenced on the judiciary issue, Ong Tee Keat will be silenced by his UMNO masters on this issue. Some things never change.

  110. hnn2008:

    Apologies for not replying to your posting earlier.

    There are two approved rating agencies in Bolehland. One is Rating Agency of Malaysia (RAM) and the other is Malaysia Rating Corporation (MARC). These rating agencies were set up to provide guidance on credit risks that were supposedly to be taken by bondholders. The ratings mirror those of Standard & Poors, the international rating agency, and range from AAA (the best or lowest risk) to non-investment grades B and C. The EPF can only invest in bonds with a rating that is A- or higher.

    MOT is the Ministry of Transport and there are comments as to whether the MOT exceeded its authority in issuing the “letters of support” for the bonds which apparently were the equivalent of government guarantees given that the bonds were ultimately rated by MARC as the equivalent credit of the Government. Whilst it is true that the usual vehicle for the issuance of government guarantees would be the Ministry of Finance, it has not stopped other ministries from providing “backdoor” guarantees under concession agreements e.g. Tanjung Pelepas, ERL. There was even a backdoor guarantee on the MAS catering deal given to Badawi’s brother where the government agreed to assume the liabilities in the event the concession holder defaults.

  111. Dear Godfather,

    No wonder Bad Awie can’t step down (there are 2 Awie in Malaysia, one is the legendary rock star, the other is a dirty liar who enjoy enriching his family pockets). If he step down, all his family members that involved in business will have to “gulung tikar” back to Mecca promote Islam Hadhari.

    Is Bad Awie plan to become Bapak Hadhari?

  112. Can you all believe that Ong Tee Keat is not a liar? Look what he responded to the KLIA shootings?

    “Meanwhile, Transport Minister Datuk Ong Tee Keat said the robbery happened in a public area and could not be considered a breach of security at KLIA.”

    “Therefore MAB (Malaysia Airport Bhd) is not responsible. It is a public matter for the police. MAB will give full cooperation in the investigations,” he said.

    The Ong’s brother and the BN are all liars.

  113. OTK still same like Bad Awie except he like talk alot!

    It is OK to shoot outside the KLIA? It is OK to bailout outside certain jurisdiction?

    What if the bullets hit someone inside KLIA? what is the difference between inside and outside when innocent civilians are been targeted?

    Once my vehicles been hit by a Malay driver at Queensbay Mall, the police told me the parking lot is a private it is not under their control. He said the guy will get RM 300 compound if he refused to admitted etc. But if we settle outside he will pay me RM 250. I end up accepting the RM 250.

    Is there such a law in Penang? I tell them, what if ppl r killed or been raped in private area? it is ridiculous for policeman to talk that their jurisdiction are limited area in Penang only, i hope the opposition can check, some of these policeman take law at their own hand.

  114. I would like to add, if OKT said that outside KLIA is a public area, mean we can have our Pasar Malam or Pasar Mingguan there because it is a public area outside KLIA.

    I would like to slapped that OKT if given the chance.

  116. Dear Godfather, well, im trying to be “kinky” juggling the 3 alphabets T, O, K

    OTK must seek advise from OKT ultimately this is the best solution & excuse the Ong’s clan can produce.

  117. What makes it immoral is the use of taxpayer dollars in the bail-out!

    I think it is ok to squander away the bulk the national resources, at least according to this self righteous hypocrite.

  119. Hey! I am the smart ass here! Remember, nobody else is privileged with an attap-type education. My favorite words for the day are ” hypocrite” and “self-righteous” and the other one ” ad naueseam” – don’t me ask for the meaning of the last one. Only to impress lar! No such word actually. Only “ad nauseam”.

  122. you phua tang sai lawyer. You can’t even hold more than two variables, you opinions make other puke lah, phua tang sai. talking to yourself again ar?, kickyourbutt, allasstra what difference, all scumbags.

  124. The Ong’s dynasties have RM 9.5 million from Uncle Lim.

    Now, another RM 4.6 Billions from the BN govt.

    Well it also involved itself in KLIA shoot out with millionth at stake. The time is very precise for a shootout to happen, the OTK comments, saying outside KLIA is a public area wow the robbers are happy to have voted for BN, now the CCTV (millionth of dollar KLIA cctv) is broken. Luckily no casualty because the command from mastermind is to shoot the leg only.

    So next time, please vote for BN for supporting criminals.

  126. Pingback: RM4.6 billion PKFZ scandal – 5 questions Ong Tee Keat must now answer | PKFZ

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