Tuesday, June 29, 2010

Port Klang Authority will pay Kuala Dimensi RM772 million !!!

As postulated in my earlier posting , today in Parliment Deputy Transport Minister Abdul Rahim Bakri has given an assurance that the government will pay what is due to the Port Klang Free Zone (PKFZ) bondholders.
Any of my dreams and hope that the government could possibly consider setting up an escrow account to hold the funds till investigations are completed is now dash to pieces.
As predicted, the government rationale is compliance to the contractual agreement with the bondholders and to protect the government bond ratings.  
Why is such an important issue not announced by the Transport Minister himself ? I supposed he is still dazed, confused and possibly shock  by the scandal.
I await MCA president,  Dr Chua Soi Lek stand on this issue. Will he come out guns blazing to condemn this decision or will he just  keep quiet dismissing it as as no concern to MCA but to be handle by the Ministry of Finance. I hope Dr Chua has the b***s to uphold his principles of integrity and transparency. He need to remember that MCA has always been closely linked and connected with PKA as far back as 1989. All the previous MCA Transport Ministers and senior party leaders such as Michael Chen, Ting Chew Peh, Yap Pian Hon, Chor Chee Heung and Lee Hwa Beng are thick and thin into PKA's planning, development and growth. If Dr Chua choose to be silent, I am very sure at the next General Election, the MCA will lose more Chinese votes.
I also await what our PM Najib has to say tomorrow.
Agreeing to pay this RM772 million looks more like a bailout of Kuala Dimensi. I was shock to read that the government also need to pay another RM328 million to the Internal Revenue Board ( IRB ) as unpaid backdated taxes. 
WHY should the government pay for taxes owing by KDSB To IRB using our taxpayer's money ? Am I interpreting right to say KDSB is profiting from this non-tax payment ? 
Why can't the government hold the payment in an escrow account until full settlement of the court case ?  Taxpayer's money is and will be use here to bailout KDSB while the corrupted  and guilty culprits responsible for this scandal  will probably go scot-free. So far the charges and prosecution on the few directors is just another " sandiwara";  the big fish is now far away in the open sea and will not be caught.
Paying KDSB is a breach of trust by the government to the rakyat and is a total shame. In the very first place, it is wrong to allow a private company KDSB to raise bonds for such a large government project - what is our Treasury doing ?? The 2 Transport Ministers signing off the letters of guarantee is another joke - I have talk about this in my earlier posting All these actions just smell plain "fishy and dirty" to me. We demand to know who are the bondholders - how many percent of them are foreigners ? Paying up would mean vast amount of money will be taken out of the country.
It was only in the last few weeks we hear what a dire situation the country is facing -  Idris Jala saying we could be bankrupt by 2019 if the subsidy cut proposals are not implemented,  Sime Darby losing billions, Felda reserve shrunk by billions, Pos Malaysia losing hundred millions, government cannot afford to sponsor any more new scholarship next year etc. And here we are seeing another " bailout" ?
DAP's MP, Tony Pua summarized it very well  :   PKA should not make any payments to the bondholders since it was KDSB that had raised the money to finance the PKFZ project through the issuance of bonds worth RM4.6 billion....PKA's obligation is not towards KDSB's bondholders.....If the government pays both the bondholders and the IRB, said Pua, "this would be the perfect scam of the century".
PKA will have to pay a total of RM1.05 billion to both IRB and the bondholders. The result will then be ... the IRB gets to collect its taxes, the bondholders get to recover their investment with interest, while KDSB escapes its obligations without having to fork out a single sen of its tax (owed to IRB).
He added that this will also save KDSB owner Tiong King Sing , who is Bintulu MP, from being sued by the IRB and bondholders.
However, the burden would then be transferred to the rakyat.
"The complete burden amounting to billions of ringgit is shifted to the hapless and helpless rakyat who will be forced to pay for the follies of the BN government,"
"(This would) enrich KDSB and its shareholders while those possibly guilty of criminal breach of trust such as former transport minister Chan Kong Choy (will) get away scot-free."

Full report at :

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