Transport Minister Datuk Seri Ong Tee Keat today rebutted in the Chinese media the Singapore Straits Times report on Tuesday that former Transport Minister Tan Sri Chan Kong Choy had been implicated in the RM12.5 billion Port Klang Free Zone (PKFZ) scandal as one of those identified as having committed serious breaches by the PKFZ Task Force headed by lawyer Vinayak Pradhan as chairman.
Ong has his theories as to how such a Singapore Straits Times report came about but Malaysians are only interested in whether as the Transport Minister who had unlawfully issued three of the four Letters of Support for the issue of multi-billion ringgit bonds by the PKFZ turnkey contractor, Kuala Dimensi Sdn. Bhd (KDSB), resulting in the Malaysian government and taxpayers being burdened with the RM12.5 billion PKFZ scandal, is Chan Kong Choy innocent or implicated in the PKFZ scandal.
As I had said when I unsuccessfully moved a motion of censure against Kong Choy as Transport Minister during the budget debate on 27th November 2007 when I proposed a RM10 salary cut against him, it is completely unacceptable for Kong Choy to say that he did not know that he did not have the power as Transport Minister to issue such Letters of Support, especially as Kong Choy was Deputy Finance Minister for close to four years from Dec. 1999 to June 2003.
If a bank officer who exceeds his authority in a loan approval by a few hundred thousand ringgit could be prosecuted under the Banking and Financial Institutions Act for jeopardizing public funds why should a Minister who exceeded his authority by committing public funds measured in terms of billions of ringgit go scot-free and need not be accountable, and even more serious, could get his unauthorized and illegal acts ratified retrospectively – creating the monster of the RM12.5 billion PKFZ scandal for 27 million Malaysians today!
Is there no one at the Ministerial and Cabinet level who need to be held responsible and accountable for the RM12.5 billion PKFZ scandal?
Is the “super task force” headed by Chief Secretary Tan Sri Mohd Sidek Hassan as announced by the Prime Minister Datuk Seri Najib Razak on Wednesday empowered to zero in on the culprits responsible at Ministerial and Cabinet level for the “heinous crime” of the RM12.5 billion PKFZ scandal or is its ulterior agenda to sanitize, minimize or expunge whatever governmental, Ministerial and political fall-outs from the PKFZ scandal?
If Chan Kong Choy is innocent then he should have contested in the 2008 general election.
I am sure the rm 10 million man otk wont be able to give you an answer
The presence of the Attorney-General, Gani Patail in the Super Task Force says it all. Expect a Super cover up soon.
Waaa, looks liket it’s gonna be a series of scandalous political intrigues eh? And Chan Kong Choy, he may not be as stupid as he looks but is all prepared with a QC, he was reported to have taken one step ahead of things.
Oi MACC. Go. Obviously LKS has failed. So go and do your job. Now. Go and bash kong choy up with steel bar wrap in newspaper. Hit his peniz and balls too and maybe get a dog to chew them up as well. Prepare the admission statement in advance. Consult najib on the content of the admission. Kong choy will sign it. Make sure he signs it. Tell him Masalam will be hell if he doesnt. But do remember this. Just dont beng him OK? Not when beng hock’s dust is still not settled yet.
Najib’s super task force is in place so to allow for a season of super power deals among UMNO’s running dogs behind closed door. First the cover up for CKC. In time everything will be under the carpet. Sigh!
//Hit his peniz and balls too and maybe get a dog to chew them up as well. //
Hey, that dog would get V.D.
“If a bank officer who exceeds his authority in a loan approval by a few hundred thousand ringgit could be prosecuted under the Banking and Financial Institutions Act for jeopardizing public funds why should a Minister who exceeded his authority by committing public funds measured in terms of billions of ringgit go scot-free and need not be accountable, and even more serious, could get his unauthorized and illegal acts ratified retrospectively – creating the monster of the RM12.5 billion PKFZ scandal for 27 million Malaysians today! ”
Uncle Lim, you’ve hit the nail right on the head!
I’m not a lawyer, but I believed that there is such a law as criminal negligence and anyone who signs a document must be clear what he is signing – more so a minister.
If the money belongs to him would he be so cavalier about the whole matter?
Make sure all the UMNO/BN rats are netted and brought to justice!
The salary obtained from the government as minister cannot last many hours of QC fees. That might be why ministers need side income!
I bet my last dollar that it is going to be a super cover up and nobody is going to be held accountable. All you have to say is “saya tak tahu” like what OC Phang, Chan Kong Choy, Ling Liong Sik, Hiong TS is doing now. Every thing will be boleh.
Chan Kong Choy (“CKC”) will put forth the following arguments in his own (legal) defence. Rebut them if you can.
1. Yes he issued Ministry of Transport (“MOT”)’s Letters of Support. They were however meant to be as what their names suggested – mere letters of “support”. In commercial transactions, Letters of Support or its variants such as Letters of Comfort or Letters of Awareness are issued to evince acknowledgement and moral support/suasion of the transaction but they are not intended to constitute a binding guarantee on the part of government. Otherwise they would be called Letters of Guarantees. Therefore you can’t accuse him of not knowing that only Ministry of Finance (“MOF”) could issue guarantees when he says that the letters of support issued by him on behalf of MOT were not intended by him in the first instance to constitute a government guarantee erroneously issued without MOF’s approval!
2. Now neither PKA nor PKFZ issued any Government bonds or sovereign debt securities. I believe (correct me if I were wrong) that it was Turnkey contractor, Tiong’s Kuala Dimensi Sdn. Bhd, (“KDSB”) that issued the bonds, given triple A rating then by rating agency Malaysian Rating Corporation Berhad (“MARC”) to provide confidence to whosoever the bondholders to subscribe for KDSB’s bonds. So CKC can now say that if MARC mistakenly rated MOT’s letters of support higher on assumption that they were as good as guarantees approved by MOF, when in fact they were not, it is not his (CKC’s) problem. The bondholders relying on this mistaken notion should direct their queries to lead arranger, Merchant Bank & legal advisor and MARC why they thought so highly of a mere letters of support as distinct from govt. guarantees. They should know that it was not PKA nor PKFZ that issued any Government bonds. It was KDSB, a private company that issued the bonds. These bonds were therefore commercial papers/private debt securities. It would be exceptional for any Govt to try guarantee commercial papers/private debt securities of a private entity! It would be different if perception were skewed by PKA itself a govt agency issuing the bonds. But it was not. It was KDSB! Now there was nothing wrong for MOT to issue letters of support to provide moral support for a private company like KDSB. After all its turnkey copntractor for govt PKFZ project. The onus is however on the lead arranger, Merchant Bank & legal advisor and MARC familiar with standard government procedures, compliance and control processes to conduct the due diligence exercise, draw difference between leters of support from those of guarantees, and advise correctly KDSB’s bondholders that letters of support were not of same stature as government guarantees, which in any case MOT could not issue without MOF’s endorsement!
3. Next question asked – if letters of support do not tantamount to financial commitment of a government guarantee why does the Public Coffer now have to be burdened with a RM12.5 billion debt? Short answer is : letters of support issued by MOT have since changed their “character” and “status” to full fledged government guarantees because of government’s retrospective ratification of these letters of support, signaling to the bondholders and market that they could treat the letters of support as government guarantees with MOF’s full backing!
Why is that (as stated in 3. above) so? CKC will say, “Don’t ask me – ask the government, the cabinet, the government’s legal advisor (AG) or even MOF. Don’t ask me because I am already out of government/cabinet when these retrospective ratification decisions were taken to make mere letters of support become government guarantees. The points above show I am innocent and not implicated. Period. I rest my case”.
CKC replied: Why, me worry?
My name is Sue and I’ll sue everyone including LKS n the super task force
Mr Lim,
When did the authority last succeeded in convicting a minister?
I have no faith in our system
/// It was KDSB! Now there was nothing wrong for MOT to issue letters of support to provide moral support for a private company like KDSB.///– Jeffrey
When has it been the practice of government to issue letter as a form of moral support to a private company? Why has it been necessary for KDSB to seek a letter from the government, to create the impression that the government is fully behind the project of issuing the bond, and has the moral responsibility to bail out if any problems existed? It is because the project was not feasible to survive self-financing.
For KDSB to issue bond, the proper approach would be to issue prospectus as in any IPOs of shares of listed companies. The project has to be viable, so that the public has the confidence that the bonds when matured have the face value it shows.
The letters of support served to say that the government is behind the bonds, and that was why it had to honour its moral support, by treating them as letters of guarantee subsequently. Had the letters not been issued, the government would not have to act, as it did. MOT has put the government in a vulnerable position whatever the content of letters meant, moral or financial. The rating agency had read into the moral responsibility that the government had to honour its pledge of support, so that the project would not fail. Roses by any name have their thorns.
Why the MOT had to do KDSB a favour when the project was supposedly meant to be self-financing? Why had not the minister been alerted to the fact that if KDSB needed a letter from the ministry then, they would need hard cash later? Was that a multi-partite project with KDSB serving as cashier?
Will Sivanesan, poof!, disappears like others before him
///Had the letters not been issued, the government would not have to act, as it did. MOT has put the government in a vulnerable position whatever the content of letters meant, moral or financial./// – Loh.
Thi proceeds on the assumption that whenever a govt agency issues letters like these, there is no difference betwen moral support and legal/financial support and no difference between letter of support and letter of guarantees. Is this the correct position?
What are the wordings of the letters of support?
Supposing they say : “the Ministry of Transport is aware of PKFZ project and that govt agency PKA has appointed KDSB as turnkey contractor. We have faith in KDSB’s financial capability and its performing its turnkey obligations as it has the means to raise financing by issuing bonds.”
Does this intend and reasonably can be construed to intend that the government will guarantee and underwrite KDSB’s bonds?
The issue really is why should the government do KDSB the favour in issuing a letter which could lead to wrong impression. The rating agency obviously took it to mean that the project had the backing of the government and it was subsequently proven correct that the government converted the moral support to financial guarantee.
Why did the minister abused the image of the government in giving the impression that the project was as solid as the government?
Jeffrey, give me credit lah, all these things you said today, I said it long ago in this blog. It is not the letters of support; it is the letters of guarantee.
Follow the damn money, who suggested the letter of guarantee after the letters of support were issued, who processed it, who recommended and supported it, and finally who approved it.
Same for the damn variation orders. Who proposed it, who processed it, who recommended and supported it, and who approved it.
Then we must look at who are the major bond holders. They must be very interested to buy these bonds – high a return with minimal risk especially after the government has guaranteed them. I don’t think those in the government (especially those in the Finance Minister) were really so stupid. But then, may be there were.
//Supposing they say : “the Ministry of Transport is aware of PKFZ project and that govt agency PKA has appointed KDSB as turnkey contractor. We have faith in KDSB’s financial capability and its performing its turnkey obligations as it has the means to raise financing by issuing bonds.”//
Jeffrey, the letters of support can say anything lah. The crux of matter is if you are bond investor, would you want to buy those bonds based on letters of support (no matter how the letters were written). You think sophisticated bond investors and traders did not know about risks and returns, about letters of support and letters of guarantee. It is a multi-parties conspiracy to default the government. By the way, this is NOT the first time this kind of thing has happened.
Tribute to MalangSial
Looks like The Malaysian Insider is being used as enlargement cream for someone with nothing better to do.
Who believes Chan Kong Choy is innocent? Anyway, Najib will cover Kong Choy’s back by forming toothless super task force!
It is dog eat dog…liars fight liars….from the same BN…and in MCA right now.
So many times…..LKS exposed this or that…..UMNO and MCA denied….and later proved all true….and not once..UMNO or MCA ever felt shameful.
It is business as usual…denying and lying..the trademarks of UMNO and MCA.
“When has it been the practice of government to issue letter as a form of moral support to a private company?” – Loh.
Even if one takes “support” here to include financial and management support, it means MOT backs PKA (as distinct from private co. KDSB per se), to put govt. agency PKA in moneys and funds, to honour its financial commitments as and when properly due to KDSB provided – KDSB keeps its bargain to honour and perform its contractual obligations to PKA. (Its not a guarantee, a guarantee means a commitment to answer someone else’s debts, and if one means KDSB’s debts to its bondholders, definitely there was no such guarantee.
Surely even such support does not include incurring govt commitment to PKA to pay KDSB if KDSB does not perform its part of the contractual obligations, or if KDSB simply charges exorbitant amounts in variation orders unsupported by works done or if the entire project becomes no more viable.
If rating agency MARC gave triple A rating to KDSB’s bonds and lead arranger, Merchant Bank & legal advisor advised bondholders that KDSB’s bonds were of high quality/yield because paymaster PKA had govt financial backing – and all bond holders got impressed – it does not translate to meaning that govt has given any guarantee directly to bondholders of KDSB via these MOT’s support letters that if KDSB could not honour its payments, Govt. would step in to be answerable for KDSB’s debts….
What I am saying is that CKC can try absolve himself by saying he gave on behalf of MOT the letters of support in sense explained above to establish how financially credible PKA was – and not to establish how financially stable KDSB was though market/bondholders might be entitled to infer from financial credibility of govt agaency PKA, the paymaster! It does not mean that he had given any letters of support that could reasonably could be construed as a government guarantee to KDSB’s bondholders that if KDSB does not honour its bonds commitment, the govt of Malaysia would honour on KDSB’s behalf!
In specific response to the other part of Loh’s statement, “The rating agency obviously took it to mean that the project had the backing of the government and it was subsequently proven correct that the government converted the moral support to financial guarantee”.
The following should also be noted:
a. It is MARC’s lead arranger’s, Merchant Bank’s & legal advisors’ problem if they read more into these letters of support than they reasonably ought to -since it must be imputed that they, as advisers, ought to have knowledge of standard government procedures, compliance and control processes requiring Ministry of Finance’s prior approval, if MOT’s letters of support were to be treated as government guarantees.
b. Yes these consultants anticipated correctly that the government gave retrospective ratification turning letters of support into guarantees. Whether govt’s decision is defensible is another issue. I am not addressing that issue at this moment. It might well not be defensible.
c. But we’re not talking of the defensibility of govt. or cabinet’s decision to convert letters of support to guarantees. We’re talking of CKC’s position when YB Kit’s fingers are pointed at him whether he’s innocent or implicated in the PKFZ scandal.
He’d just have to say that he was already out of the cabinet when its collective decision was taken to restropectively ratify and convert the letters of support to guarantees. So why blame him (CKC) personally if that decision of retrospective ratification by government proves unwise or inimical to public interest?
You guys remember Loh Hai Chat – that UMNO Baru guy who contested in the Permatang Pasir by-election, and who was so cock-sure of winning because of his ‘lady-killer’ look? Never mind that he lost because the women voters did not support him.
Thinking back, I am of the opinion that this Loh Hai Chat is the most honourable of all UMNO Baru thieves. When he was found out to have stolen the RM140k, he was gentleman enough to fork out the money to pay his clients. But not so with those involved in the PKFZ 12.5 billion skandal.
Instead of saying “saya tak tau” they should learn from Loh Hai Chat, cough out the stolen money ( even 6.25 billion is good enough ) and maybe, just maybe rakyat will forgive you and vote you into power again in the 13th GE. If not, at least Allah will view you act favourably as you are showing repentance. This will be a WIN-WIN situation!
Will Mah HA Tee and Najib take the lead???
You do not need Money in Heaven.
IT IS DISGRACEFUL AND VERY SHAMEFUL FOR MCA GOONS HAVE ALWAYS DENIED WITH MANY STUPID ANSWERS LIKE :-
” I DONT KNOW CASHFLOW PROJECTION”
” SAYA TAK TAU ” or “I DONT KNOW”
” THE LETTER IS A SUPPORT LETTER AND NON GUARANTEE “.
MCA IS TOO POOR WITH RM2 BIL ASSETS IN HAND TODAY, DONT WANT YOUR SMALL TIONG DONATION OF RM10 MIL TO MCA BUT MISSING IN AWOL UNDER ONG TEE KEAT LEADERSHIP IN MCA – WHO POCKET RM10 MIL ?
THE BN TASK FORCE IS SET UP TO BROOM THIS PKFZ, A MOTHER OF ALL SCANDALS SWEEP INTO A ALLADIN CARPET FOREVER. BELIEVE IT OR NOT >?
CHINESE VOTERS AND COMMUNITIES KICK MCA OUT IN NEXT 13GE SOON.
Ong Tee Kiat is just a PKFZ toilet cleaner.
With the setting up of the Super Task Force recently, we will soon hear about the “Super Fast” cover-up of the PKFZ “mother of all scandals”.
If Najib is not satisfy and happy with the report prepared by the Task Force, he just has to throw the report back to the Task Force and instructs them for more details. After all, the taxpayers has agreed to pay them the agreed consultants fees to do a proper job for the rakyat.
Is Najib trying to buy time? Will there be another Extraordinary Super Task Force after the Super Task Force, Najib? Najib, set the deadline for the show to come to an end and this is what the rakyat want. Prove to the rakyat, PERFORMANCE NOW is translated into action and not mere talk.
If Chan Kong Choy didn’t want to be part of all this dirty and illegal things, why hang on to his Minister’s post for so long? Fact is: he knew these illegal things going on, and he didn’t resign as a Minister to show he didn’t want to be part of it. Probably someone is holding his b@lls, and he was forced not to contest in 2008.
All of MCA is good for nothing: See this article about Chua Soi Lek.
http://mt.m2day.org/2008/content/view/26772/84/