Monday 20 August 2007

Govt IS Bailing Out Port Klang Free Zone (PKFZ) Authority: SCANDALOUS If the Culprits Are NOT Brought to Justice

Read here full article in The Sun: Story by R. Nadeswaran and Terence Fernandez
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Excerpts: Read here for more

Reason for the Bail Out with Tax Payers' Money:

Because the Transport Ministry GAVE the Undertakings Despite the fact that the Transport Ministry Was NOT Authorised To Do So.
  • The Transport Ministry issued FOUR "Letters of Support" between 2003 and 2006.

  • The Letters COMMITTED the Government to ensure that at ALL times, the Port Klang Authority (PKA) will fulfill ALL its financial obligations to Kuala Densi Sdn Bhd. (Kuala Dimensi's current Chairman is UMNO treasurer Datuk Azim Zabidi.)

  • The "Letters" were used by Kuala Densi Sdn Bhd to get an AAA rating from the Malaysian Rating Corporation Bhd.

  • Port Klang Authority had already started having problems in attracting investors and it could not meet its yearly payments to KDSB.

  • Bankers contacted by the Sun said that, in effect, these four "Letters" were Letters of Guarantee. (Note: ONLY the Treasury can issue such Letters of Guarantee.) Ministry sources argue that they merely "supported" the applications

  • The bankers said it was an undertaking by a Ministry BINDING on the government. As such, there was no option left for the Treasury , but to continue to issue fresh letters and to make the Guarantees RETROSPECTIVE.

The letters of support, irregular as they were, could have put the Government in an embarrassing situation as well as send the PKA into receivership.

The financial circles are asking if advice was sought from the Attorney-General's Chambers BEFORE they were issued.

One banker said:

"When you give such undertaking for that kind of money, common sense dictates that proper advice must be sought because such letters BIND the government.

Although the government can wash its hands of the deal and say it had nothing to do with it, it could not (so) because the (Transport) Ministry - an arm of the Government - had made the commitments."
Industry sources said even BEFORE the deal between PKA and KDSB was signed in 2001, there were already VEILED THREATS that the PKA would have to pay in excess of RM100 million IN COMPENSATION if it reneged on its verbal agreements.

The UMNO and UMNO Youth Connection

Photo Sharing and Video Hosting at Photobucket Kuala Dimensi's current chairman is UMNO treasurer Datuk Azim Zabidi.

The company acquired the land for the project in the 1990s for RM96 million, or roughly RM3 per sq ft. Kuala Dimensi bought the land from Pulau Lumut Development Cooperative Bhd (PLDCB).

Present PLDCB chairperson Abdul Rahman Palil is a Selangor executive councillor and Sementa state assembly person. He is the Kapar UMNO division head.
When the Port Klang Authority (PKA) proposed to buy the land from Kuala Dimensi, PKA 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 PKA 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.

The legal firm, Rashid Asari & Co, drafted the March 2004 land development agreement between PKA and Kuala Dimensi. The lawyer engaged to draft the agreement works for ‘the other side,' ie the lawyer also works for Kuala Dimensi.

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

Photo Sharing and Video Hosting at Photobucket Among Rashid’s fellow Excos in the Kapar UMNO division is its permanent chairman Onn Ismail.

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

Photo Sharing and Video Hosting at Photobucket Wijaya Baru Global Bhd (WBGB) was the the property developer and investment firm behind the sale and development of PKFZ. Faizal Abdullah is the the deputy-Chief Executive officer of Wijaya Baru Global Bhd (WBGB). He is also Onn Ismail's son in law and the Kapar UMNO division’s Youth Chief.

Read here for more on UMNO and UMNO Youth's Connection in this scandalous affair

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