| Talam Debt Recovery: A Testament of Pakatan Good Governance Posted: 15 Jul 2012 08:48 PM PDT The Selangor administration led by Tan Sri Khalid Ibrahim has proven that its integrity, accountability and good governance in managing the state's finances and serves as a preview of how Pakatan Rakyat will run Putrajaya
The recent "egg-in-the-face" expose by Datuk Chua Tee Yong over an alleged RM1 billion land scandal in Selangor has instead allowed the state administration to showcase our integrity and accountability in managing the rakyat's money, in stark contrast to the Barisan Nasional (BN) government.
The facts which has surfaced over the past few days since Datuk Chua's sensational expose that was given front page treatment by BN-owned mass media has proven that Datuk Chua not only could not tell the difference between debit and credit columns of a balance sheet, he had the uncanny subtraction ability of "two minus one equals three" (2 – 1 = 3).
The records show that Talam Corporation Berhad was allowed to incur debts of RM392 million to the Selangor government during the BN administration before 2008. These debts were never properly documented or recorded in the books of the state government companies – Universiti Industri Selangor (UNISEL), Kumpulan Hartanah Selangor and Permodalan Negeri Selangor Bhd (PNSB). What is worse was the fact that there was no effort made by the BN administration to collect these debts.
However, the new Pakatan Rakyat state led by Menteri Besar Tan Sri Khalid Ibrahim has demonstrated that with political will, no company will be able to escape from paying its debts to the Government. Within a year after discovering the discrepancy in the state-owned companies' financial records, Tan Sri Khalid has via the Menteri Besar (Incorporated) (MBI) recouped every sen of the RM392 million debt from Talam Corporation in the form of cash and properties.
The most remarkable thing about the entire exercise was the fact that the Selangor government did not have to suffer any haircuts in the debt recovery exercise despite the fact that Talam itself was just recovering from severe financial difficulties. On the contrary, the state government was able to RM676 million of property assets which was valued by an independent valuer to be worth more at RM685 million.
On the whole, despite having spent hundreds of millions of ringgit more in terms of welfare subsidies and grants for the people of Selangor, such as the RM130 million 20m3 free water subsidy for every household each year, the Mesra Usia Emas Programme for the elderly and the RM300 million infrastructure grant from MBI, the state financial reserves have increased from only RM733 million in 2008 when Pakatan Rakyat took over, to a whopping RM1.9 billion as at May 2012.
This stands in stark contrast with the BN federal government which continues to fund itself with debt and deficit. Instead of collecting in full the court-ordered judgement of RM589.15 million from Tan Sri Tajudin Ramli, the BN administration has chosen to write off the debt in its entirety, causing massive losses to the rakyat of Malaysia.
What rubs salt to wound is the fact that these debts were incurred as a result of the privatization of Malaysia Airlines System (MAS) to Tan Sri Tajudin and his subsequent bailout which cost tax-payers more than RM3.2 billion. MAS had then ratcheted up more than RM8 billion in debt before it was handed back to the Government in 2001.
As a result of such massive bailouts as well as write off of debts owed by crony companies, the Federal Government debt has increased by leaps and bounds from RM242 billion in 2007 to RM363 billion in 2009 and RM456 billion in 2011. This represents an 88.4% increase in Federal Government debt in just 4 years! The above has yet to take into account the unseen debts guaranteed by the Federal Government which stands at RM117 billion as at December 2011.
The above examples offers incontrovertible testimony that Pakatan Rakyat will be much better managers of the country's finances compared to BN. We will ensure that all debts are collected and are utilized to the benefit of the rakyat. We will stop bailouts of political cronies and ensure that brakes are applied to the runaway debt train.
There is no question that by ruling the country with the principles of competency, accountability and transparency, as showcased in the examples above, Pakatan Rakyat is the proven coalition to allow Malaysians to achieve their full unrealized potentials.
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| "Tony Pua vs SYABAS" Fund-Raiser: Mission Accomplished! Posted: 15 Jul 2012 01:36 AM PDT
The DAP would like to make an official announcement to declare that we have collected sufficient funds from our "RM1 for Water Rights: 100,000 Malaysians Support Tony Pua vs Syabas" Campaign! The campaign is an overwhelming success, and we will end the online fund-raiser today.
As at 4pm 13/7/12 (Fri), the online donation campaign has raised RM143,256, a remarkable achievement of small contributions from tens of thousands of Malaysians in less than a week.
The KL High Court has ordered Tony Pua to pay RM200,000 in damages plus interest plus costs. SYABAS is claiming RM80,000 for costs, but this is amount being negotiated.
The Party will be able to raise the balance of the required funds from our sell-out fund-raising dinner on 17/7/12 (Tue) Dewan Sivik MBPJ. The dinner has sold more than 100 tables.
Any excess funds from the collection will go into the DAP General Election Fund.
We would like to thank all Malaysians for the generous support and this only proves that is we act together, we can change the nation!
Background of this issue:
Selangor state government launched a campaign in 2009 to buy-back the privatized water concessionaires in order to provide quality water at affordable prices.
Tony Pua campaigned hard for the above and was sued for defamation by SYABAS. The High Court awarded RM200k in damages to SYABAS.
Hence we are calling for 100,000 Malaysians to contribute as little as RM1 each to support Tony Pua in his effort to battle with SYABAS and to continue to speak up for the Rakyat in this issue.
Tony has appealed the judgment to the Court of Appeal but he has been asked to pay the damages to SYABAS first. If the appeal is successful, the money collected in this campaign will be channeled to DAP General Election preparation fund. |
| Did Selangor Bail Out Talam? Posted: 08 Jul 2012 08:44 AM PDT Datuk Chua Tee Yong is confused. He is aware that Talam owes the Selangor government RM392 million. If that is the case, then why would the Selangor government "acquire" RM676 million of assets from Talam?
He alleged that "this is a clear cut case of bailout whereby PR Selangor Government used the Rakyat money to help a listed company by buying a lot of its assets."
What the Selangor government did was to have Menteri Besar Incorporated (MBI) legislated to takeover the debts Talam owed to UNISEL (RM255 million), Kumpulan Hartanah Selangor Bhd (RM115 million) and Permodalan Negeri Selangor Bhd (RM22 million). This means that MBI will do the collection for the above debts amounting to RM392 million directly from Talam.
These debts were not previously accounted for, and no efforts were made by the respective Selangor subsidiaries to collect these debts. Hence to ensure that all outstanding debts due to the state government are collected, Tan Sri Khalid Ibrahim himself has made it his personal mission to ensure that the Selangor rate-payers will not be shortchanged.
So how did MBI collect the debt?
After months of hard-nosed negotiations, Talam had agreed to make the full payment of RM392 million in the form of cash and assets, in 2 tranches. The first tranche was in 12 March 2010, while the second was in 9 April 2010. The settlement of Talam debt to MBI was fully disclosed in Bursa Malaysia and the related financial documents are publicly available on the above dates on Bursa's website.
In summary, Talam paid RM12.7 million in cash and settled the balance in property assets. Were we shortchanged by the assets?
Some of these assets still had outstanding balances with the bank. This means that if the state were to take over these assets, the state will need to "settle" these outstanding loans. In this case, MBI took over RM676 million of assets from Talam, which had RM266.2 million of loans outstanding and RM30.5 million of other fees to be paid. Hence the net value accruing to MBI for these properties after deducting the loans and fees, will be RM379.2 million.
By adding RM379.2 million to RM12.7 million, Talam would have settled in full its debts of RM392 million. This means that MBI had collected RM392 million worth of additional cash and assets as part of the exercise.
I would like to ask Datuk Chua who is not only a trained accountant, but a former Chief Financial Officer of a Government-linked Company, where is it in the above debt recovery exercise has the rakyat's money been abused?
Datuk Chua in his statement, accused that "… the PR Selangor Government has acquired RM676 mil of assets to bailout TALAM." Datuk Chua must enlighten me as to how taking RM676 million worth of property with net asset value of RM379.2 million bailing out Talam? We are taking assets away from Talam, not giving them more assets!
If I were Talam, I would be mighty upset because under the BN reign, I didn't need to pay back a single sen to the state government agencies, but under PR, I'm forced to give up hundreds of millions of assets in order to settle my debts.
Datuk Chua also said that "from this deal, TALAM walked away with cash over RM266 mil which is paid to Talam bankers. The exact figures I have not worked out yet." I can only assume that Datuk Chua hasn't "worked [it] out yet" because he hasn't got a clue what is going on.
In fact I'm completely stunned because surely he could have worked out that even though Talam managed to "settle" the RM266 million outstanding with their bankers for the loans they took for the properties, Talam gave up RM676 million worth of assets to MBI in return? And based on the Mathematics we learnt in school, I believe RM676 million is far larger than RM266 million.
Datuk Chua attempted to confuse the public even further with his own blunder and confusion by arguing that "instead of just recovering RM392 mil debt, PR Selangor Government bought up to additional RM284 mil worth of assets from TALAM to assist the company."
Conclusion
I will conclude that Datuk Chua failed to differentiate between "buying" assets and "taking over" assets as part of a debt recovery exercise.
I strongly suggest that Datuk Chua and his team of Selangor MCA leaders, including MCA Selangor Youth Chief Dr Kow Cheong Wei, MCA Selangor Public Services and Complaints Chairman Dato' Theng Bok and veteran comeback politician, Datuk Yap Pian Hon, who stood with him over these baseless and frivolous allegations, to publicly apologise for misleading the Malaysian public with their inadequate understanding of corporate finance.
They should stop making a complete fool of MCA and themselves. This "advice" includes their latest claim that the Selangor Government had "overpaid" for a piece of land from Talam.
They have 24 hours to repent and withdraw their baseless accusations. If not, I'll hold another press conference same time tomorrow to shred to pieces their allegations that Selangor had "overpaid" for land in the above debt recovery exercise, whether it is RM41 million or more.
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| Chua Tee Yong Double Counts Talam "Scandal" Posted: 07 Jul 2012 08:38 AM PDT
Datuk Chua Tee Yong had claimed that the "PR Selangor Government must explain to the Rakyat the acquisition on the RM676 mil worth of assets and the usage of RM392 million allocation which total to the RM1 billion questionable deal."
Firstly, from a mathematical standpoint, using RM392 million to acquire RM676 million of assets does not add up to a RM1 billion questionable deal. That's elementary double-counting.
It's like saying he used RM40,000 to acquire a RM60,000 car. It's either a RM20,000 cock-up, or a RM40,000 abuse or a RM60,000 con-job. It's NOT a RM100,000 scandal.
But that's not important. What is important is whether the Pakatan Rakyat (PR) Selangor government had abused tax-payers' monies to bailout financially troubled company, Talam Corporation as alleged by Datuk Chua. Check out subsequent posts for details.
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| Chua Tee Yong Should Stop Embarassing Himself over Talam Posted: 06 Jul 2012 08:31 AM PDT Datuk Chua Tee Yong should stop embarrassing his Party and himself further over the ficticious RM1 billion Talam bailout by the Pakatan Rakyat Selangor state government For two days, Datuk Chua Tee Yong tantalised the Malaysian public and teased Pakatan Rakyat leaders with the spectre of a RM1 billion scandal by the Pakatan Rakyat state government. He started on 30 June 11.47am: "I am shocked by a 1 billion questionable deal in selangor. I hope the information I receive is correct." Followed by another one at 3.48pm on the same day: "The 1billion questionable deal is by the pr government. Shocking..." And another at 8.50pm: "The rm1billion deal by PR govt is shocking cos of how well they have concealed it. #prdeal" Then at 10.59am on 1 July: "Pr 1billion questionable deal Involve lots of rakyat money,state companies, private company. Lots of transaction.#prdeal" Again a similar tweet at 3.36pm: "PR govt claims 2 b transparent, do d best for d ppl n rakyat is boss but this 1 billion questionable deal shows it is all empty talk.#prdeal" And finally on 2 July he announced that he will hold a press conference over the issue the next day: "I will be giving a press conference tomorrow on "PR 1 Billion Questionable Deal". #prdeal" And what a press conference it was. The "Questionable Deal" not only confounded the reporters present, Pakatan Rakyat leaders were just stunned.
We were of course unable to make any comments or respond to the ridicule heaped upon us by the BN cybertroopers before Datuk Chua's press conference because his tweets contained absolutely no information with regards to the RM1 billion allegation. But after discover what his RM1 billion "questionable deal" was, we were simply shocked by how Datuk Chua Tee Yong got all his substantive facts over the deal wrong, to the extent that we weren't sure whether it was a R266 million, RM676 million or RM1 billion scandal by the state government.
I will be holding a press conference tomorrow to strip Datuk Chua Tee Yong's complicated accounting allegations naked tomorrow morning.
For now, I'd like to refer to Talam Corporation's press announcement made yesterday afternoon. It is clear from the points of fact raised in the statement that the Deputy Minister of Agriculture got his basic assumptions completely wrong.
Datuk Chua had alleged that "before the deal…, Talam was still under PN17 with lots of debts". He further added that "The shares of Talam cannot be traded in the stock exchange before the deal…" Hence he concluded that "this was a clear-cut case of a bailout where the Selangor government used the rakyat's money to help a listed company by buying its assets".
Factual error #1 is that Talam has on its own accorded completed the financial Regularisation Plan approved by 1st July 2009, well before the "deal" with the state government at the end of 2009. Hence the "deal" had nothing to do with Talam's financial Regularisation Plan, and hence cannot be a bailout as alleged by Datuk Chua.
Factual error #2 is that even when Talam is a PN17 company, its shares were never suspended as a result and was freely traded on the stock exchange. Datuk Chua, of all persons, being a former Chief Financial Officer of a Government-Linked Company should not be making such a mistake!
Datuk Chua should learn that before making an "expose" he must get his basic facts right of the pie will be in your face.
The worst part of this ridiculous expose is the sheer audacity by Datuk Chua and MCA to label the Selangor government's collecting of RM391 million long outstanding debts incurred during the Barisan Nasional era, a "bailout" of the debtor Talam. It is no wonder BN's management of GLCs and its crony companies is so screwed.
But that's my very own "teaser" for the day. Tomorrow I will explain clearly how Datuk Chua failed his accounting test in this "Questionable Deal".
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| H&I Niaga Wound Up; 123 Sub-Contractors in Jeopardy Posted: 06 Jul 2012 08:28 AM PDT H&I Niaga Sdn Bhd has been wound up by Affin Bank, RM23.1 million payable to 123 subcontractors and suppliers in jeopardy
Yesterday the KL High Court Judge Tuan Mohammad Ariff Bin Md. Yusoff has granted an Affin Bank application to wind up H&I Niaga Sdn Bhd due to an outstanding amount of RM12.8 million. Datuk Ng Seing Liong from Messrs S L Ng Corporate Solutions Sdn Bhd has been appointed as the liquidator.
As far as the RM131.9 million suit against BNM is concerned, the matter will now be stayed. It will now be up to him to decide as to whether to continue with the RM131.9 million suit against Bank Negara Malaysia (BNM).
BNM had issued a statement yesterday to state that H&I Niaga had asked for arbitration into the dispute but pulled out at the last minute. "H&I Niaga had initially referred the contractual dispute for arbitration but, on the first day of the hearing, H&I Niaga withdrew from the arbitration process."
The above statement is mischievous because BNM had refused to cooperate in the arbitration process and had sought to delay it as long as it could in order to leave H&I with no more time to settle before it got wound up.
The notice of arbitration had been sent to BNM since 13 September 2011 but the first preliminary meeting for arbitration was only held on 13 January 2012. In addition, only as late as 28 March, BNM lawyers had requested for "security for costs", which given H&I's inability to pay, would have derailed the entire arbitration process.
And on 5 April, BNM attempted again to derail the arbitration process by putting into it into abeyance via a wrongfully obtained winding up order against H&I. The lawyers for H&I managed to throw out the winding up order, but that had delayed the process further.
By 14 June, it was clear to H&I that BNM has no intent of seeing through the arbitration process and was using every trick in the book to delay the process while at the same time conspiring with other parties to have H&I wound up.
In fact, if BNM is even sincere about a settlement with H&I, the latter would not even have to go through the time-consuming and costing arbitration exercise. The fact that between the H&I termination in 27 April 2010 and the decision to go through arbitration in September 2011, the company had tried its best via all means to come to a settlement with BNM but it was of no avail because BNM was not even interested to pay a single sen to H&I.
What is most telling is BNM's own admission in its press statement the termination of Bumiputera contractor H&I Niaga Sdn Bhd was in the "final stages of construction for the Malaysia Financial Services Resource Centre (FSRC)". The termination at such a late stage of the project defies logic and only indicates malice in the process.
As a result of BNM's actions, H&I will not be the only victim as its subcontractors, whether in the FSRC project or in other projects will not get paid the proper dues.
For example, H&I still has retention sums for completed projects – Information technology and communications laboratory for Universiti Islam Antarabangsa Malaysia (UIAM), Upgrading of Institut Kemahiran Tinggi Belia Negara and Dental Faculty of UiTM Sungai Buloh Campus amounting to RM1.8 million, RM2.0 million and RM5.6 million respectively - which are payable to some of their subcontractors. Hence even though these subcontractors had nothing to do with the BNM project, their monies will be similarly withheld due to H&I being would up.
In total, H&I still has an outstanding amount of RM23.1 million still payable to its subcontractors and suppliers, which is not in doubt.
The above case demonstrates that the words of the senior management cannot be trusted when conducting normal business dealings with BNM. Before termination, H&I had two meetings with Tan Sri Zeti Akhtar Aziz (Governor of BNM), Dato' Zamani Bin Abd Ghani (then Deputy Governor of BNM) and Dato' Mohd Nor Bin Mashor (then Assistant Governor of BNM) on 16 May 2009 and 8 April 2010, respectively. On both these occasions, Tan Sri Zeti has explicitly expressed that she would do her level best to ensure H&I received their payments and claims for delays in the project. This is a matter which had not been denied by BNM in its statement.
This act of injustice against H&I and its 123 sub-contractors has seriously jeopardized the good name of BNM. What we are witnessing here is the complete opposite, the victimization and destruction of an honest and competent 100% bumiputera Class 'A' contractor.
If BNM has any sincerity at all in resolving the above dispute, then surely it will attempt to offer a settlement with H&I even as of now, despite the latter having been wound up. If not then BNM will just be perceived as an unethical institution which has sought to absolve its own mistakes with the misfortunes of its contractors and sub-contractors.
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| "Low-Cost" KLIA2 To Now Cost RM5 Billion? Posted: 05 Jul 2012 08:25 AM PDT I read with shock on Air Asia Chief Executive Officer Tony Fernandes' blog that the cost of the new KLIA2 "low-cost" airport has ballooned to a shocking RM5 billion.
The initial budget for the airport when it was first announced by Dato' Seri Ong Tee Keat, the then Transport Minister in July 2007 was only RM1.7 billion. (Berita Harian 22 July 2007)
The budget was subsequently increased to RM2.0 billion in March 2009 (The Star 10 March 2009), and then RM2.5 billion in October 2010 (Business Times 30 October 2010).
At the end of last year, Malaysia Airports Holdings Berhad (MAHB) shocked Malaysians by disclosing that the cost of the new airport has ballooned to RM3.9 billion due to cost overruns in November 2011. Hence the new estimated cost of KLIA2, RM5 billion is now nearly 200% above the original budget of RM1.7 billion.
I have repeatedly called for the cost of KLIA2 to be investigated by the Public Accounts Committee (PAC) as well as the Ministry of Transport since last year. However, the attempts to secure accountability over the massive scandal has been impeded by the lack of urgency in the PAC as well as the absolute disinterest by the Minister of Transport, Dato' Seri Kong Cho Ha.
Despite several promises to meet Pakatan Rakyat Members of Parliament over the issue since last year, Dato' Seri Kong Cho Ha has failed to so.
I had requested for an explanation from his ministry over the issue, particularly over the reason for the shift of the airport from the originally proposed northern site (KLIA North) to the current western site (KLIA West) which is under construction. The shift of the site has caused the cost of construction to bloat because KLIA West was already identified as unsuitable for the construction of an airport due to it being a peat swamp.
The result of the shift for example, has caused substantial increase in earthworks cost, which the Ministry of Transport claimed to cost RM773 million, but is believed by many parties in the industry to be even higher.
However, despite the seriousness of the mismanagement of public funds, Dato' Seri Kong Cho Ha has refused to provide any details in his parliamentary reply, and merely shrugged off the issue claiming that the decision to shift the site was "based on KLIA Blueprint December 2008".
What is worse is the Minister's complete lackadaisical attitude towards the brazen abuse of tax-payers' funds. The Transport Minister has responded to my statements earlier by saying that I was "playing politics" (Bernama) and was "barking up the wrong tree" (The Star).
Dato' Seri Kong said I "should direct questions about the construction of KLIA2 to Malaysia Airport Holdings Berhad (MAHB) instead of accusing him of trying to cover up." He had further added that he has "nothing to hide. I'm not an airport engineer or consultant for the project and whatever the information I have about the project were given by MAHB."
In fact, at the rate the cost of KLIA2 is piling up, it will soon become a much bigger scandal than the Port Klang Free Zone project which cost increased from an initial RM1.1 billion to RM12.5 billion.
In the interest of transparency and accountability, the Prime Minister must order a full public investigation into how the cost of the new "low cost" airport could be so inflated and ensure that all who are responsible for the RM5 billion fiasco be sacked from their office, including that of the Minister of Transport.
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| Crime In Selangor on the Rise? Posted: 03 Jul 2012 02:01 AM PDT Selangor Deputy Chief Police Officer effectively admitted to rising crime in Selangor and a conspiracy by Home Ministry and Pemandu to lay the blame on perception and the media
Selangor Deputy Chief Police Officer (CPO) Datuk A Thaiveegan had curiously blamed the recent increase in crime on the repealed Emergency Ordinance (EO), which resulted in the "the mass release of suspected criminals from Simpang Renggam detention centre."
He even speculated that "…we see there is a rise in crime (recently) because they've been in (detention) for too long, they need 'exercise', so they come out and immediately they carry out their activities."
Datuk A Thaiveegan's admission of rising crime in Selangor flies directly in the face of the Home Ministry and PEMANDU's dogged insistence that the Government's fight against crime is successful and correspondingly the crime index has fallen significantly.
Minister in Prime Minister's Department, Datuk Idris Jala was quoted in The Star on Sunday 24 June 2012 that, "if the [crime] statistics are not convincing, perhaps then we should try to dwell into how the police were able to bring the crime rates down in a specific area, for example, one of the hotspots".
He further called on the media to play its role in fighting crime and help arrest the "doom and gloom" by reporting on solved cases and not sensationalising crime by repeatedly reporting the same news.
At the same time, However, Home Minister, Datuk Seri Hishammuddin Hussein had said that the recent cases of violent crime were "isolated". He said "blowing a few cases out of proportion would create a perception that Malaysia was unsafe country, when official data showed otherwise".
Hence the Government has not only provided contradictory and piecemeal statistics on crime incidence which do not provide a complete picture of crime in the country, we now have the Selangor police and the Federal Ministers telling different stories to the public.
Given the complete lack of transparency as well as the sheer lack of consistency in the state of crime in the country, it is not a surprise that the Malaysian public do not trust the authorities. What makes it worse is the Government's refusal to acknowledge the fears the men and women-on-the-street face when they are in or out of their houses.
While the Federal Ministers had placed the blame on media and perception, the Selangor Police's blame in the repeal of the EO is even more comical. The Deputy CPO is admitting that they lacked the competence to solve criminal cases, and that they have to throw every suspect into detention without trial, innocent or otherwise, in order to cut down crime.
We call upon the Government to get its act together. The persistent refusal by the Home Ministry to provide detailed crime statistics, even at the official request of elected Members of Parliament, smacks of cover up and manipulation. The respective authorities must hence stop the denial syndrome and start taking concrete measures to tackle the rising spate of crime, especially in Selangor.
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| H&I Niaga Sues Bank Negara for RM131.9 million Posted: 02 Jul 2012 01:57 AM PDT
H&I Niaga Sdn Bhd is Class "A" Bumiputera contractor who has been in existence since 1998. They were recognised as a "Kontraktor Wibawa" by the Guild of Bumiputra Contractors.
H&I has successfully completed more than RM460 million worth of construction projects around the country including a RM164.7 million Engineering Complex project for Institut Teknologi Mara, Shah Alam and a RM56.7 million low-cost housing project for Syarikat Perumahan Negara Bhd. Other clients include Universiti Malaya, Ministry of Works, Ministry of Youth & Sports as well as Perbadanan Kemajuan Negeri Selangor (PKNS).
The 2 key shareholders of the company are Dato' Ismail Mohd Hashim (50%) and Ir Amerudin bin Ismail (40%). They are also respectively the Managing and Executive Directors of the company.
The Project and Dispute with Bank Negara Malaysia (BNM)
BNM awarded H&I the RM320.3 million contract for the construction of its Financial Services Resource Centre (FSRC) on 14 September 2005. The Project was initially anticipated to take 22 months to complete i.e., it was to be completed by August 2007. However, there were numerous delays to the Project as a result of BNM's failure to make prompt decisions and instructions on critical matters.
Despite the delays, BNM had successfully held the Islamic Financial Services Board Conference at the FSRC on 23 November 2009. By then, the project was already 97% completed.
However, since May 2009, H&I was not receiving adequate progress payments from BNM. H&I had two meetings with Tan Sri Zeti Akhtar Aziz (Governor of BNM), Dato' Zamani Bin Abd Ghani (then Deputy Governor of BNM) and Dato' Mohd Nor Bin Mashor (then Assistant Governor of BNM) on 16 May 2009 and 8 April 2010, respectively. On both these occasions, Tan Sri Zeti has explicitly expressed that she would do her level best to ensure H&I received their payments and claims for delays in the project.
Instead on 27 April 2010, BNM terminated the Contract with H&I. BNM then decided to appoint Putra Perdana Construction Sdn Bhd as management Contractor to complete the remaining works on the Project at the cost of RM71,999,735.46, who in turn engaged the same subcontractor appointed by H&I meant to complete the balance 3% works.
H&I has exhausted all means to settle the above matter with BNM in an amicable manner. This includes initiating an Arbitration process between the disputing parties in September 2011. However the lack of cooperation and urgency on the part of BNM to resolve the matter has left H&I with no choice but to institute legal action against BNM.
This is because H&I creditors have made claims and filed suits against the company for outstanding amounts of approximately RM60 million. This includes an attempt to wind up H&I by Affin Bank for an outstanding amount of RM12 million.
The dispute has caused a complete collapse of H&I which was a highly successful bumiputera construction company with more than 60 staff to only 3 today.
The Suit
The legal suit is filed against BNM, Tan Sri Dato' Ungku Dr Zeti Akhtar Abdul Aziz, Dato' Zamani Abd Ghani and Dato' Mohd Nor Manshor.
H&I seeks to claim the amounts of RM81.9 million for outstanding payments, including costs for project delays and out-of-pocket-expenses; and RM50 million for financial and reputational damages to H&I.
The suit also seeks a Court Declaration that the defendants have made fraudulent representations to H&I and request the Court to make a ruling on aggravated damages as a result of such representation.
Conclusion
I see from the above case that H&I and its shareholder-directors have been maliciously penalized by BNM due to faults of BNM.
BNM has not only caused losses to an honest company, but single-handedly destroyed everything that these 2 men have built over the past 24 years. Dato' Ismail and Ir Amerudin have bent over backwards and taken all necessary steps to ensure that the FSRC gets completed despite the tens of millions of ringgit of additional financial cost they had to bear to cope with the delays in the project caused by BNM management.
They even took pains to try to negotiate an amicable settlement with BNM for more than a year, firmly believing that such a key government institution and its top-ranking officials would never leave them high and dry. However, their trust was betrayed and their faith completely misplaced.
The Government talks about protecting, supporting and promoting bumiputera entrepreneurs in its affirmative action programmes. And yet, what we are witnessing here is the complete opposite, the victimization and destruction of an honest and competent 100% bumiputera Class 'A' contractor.
We call upon BNM not to act as a big bully in its relations with its contractors and negotiate a fair settlement for the outstanding sums due to H&I.
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