Wednesday, June 30, 2010

The Perfect Scam?

Will Kuala Dimensi Sdn Bhd (KDSB) get away scot free for not paying RM328 million in outstanding taxes?

The Port Klang Authority (PKA) is due to pay the next instalments amounting to RM772 million in 2010 to various bondholders on behalf of Kuala Dimensi Sdn Bhd (KDSB). The latter which is owned by Barisan Nasional Backbencher's Chairman in parliament, Datuk Seri Tiong King Sing, is the main contractor for the controversial Port Klang Free Zone (PKFZ) white-elephant project which may cost the government up to RM12.5 billion.

Despite the fact that PKA has sued KDSB for up to RM1.4 billion for fraudulent and excess claims last year, the former was instructed by the Ministry of Finance to make an instalment payment of RM660 million in 2009 due to the fact that the former Minister of Transport, Tan Sri Chan Kong Choy, having provided a guarantee to the bonds raised by KDSB.

However, it has now been discovered that KDSB has outstanding taxes due to Inland Revenue Board (IRB) amounting to RM328.4 million. The IRB has in its letter dated 23 June 2010 to PKA instructed that any payments due to KDSB must have the unpaid taxes deducted, and made payable to IRB. The IRB is empowered to do so under the Section 67(4) and 68(1) of the Income Tax Act 1967.

PKA has accordingly informed the various KDSB bondholders of its intent to withhold 2 payments – RM230 million due on 30 June 2010 and RM120 million due in July 2010 – for the purposes of settling the outstanding income taxes of KDSB.

The KDSB bondholders are understandably upset with the development as there is a likelihood tha they may not be paid for the loans extended to KDSB. However, based on the previous action taken by the Ministry of Finance, they will once again insist that PKA make full payments amounting to RM772 million to the bondholders to fulfil the “guarantee” which has been provided by the Government by virtue of the letters of guarantee signed by Tan Sri Chan Kong Choy.

In such eventuality, the result will then be the “perfect scam” of the century where the IRB gets to collect its taxes, the bondholders get to recover their “investment” with interest, while KDSB escapes from all its obligations without having to fork out a single sen of tax.

Since PKA has paid IRB on KDSB's behalf from the payments due to the bondholders, IRB will not need to sue Datuk Seri Tiong King Sing and KDSB to recover the outstanding taxes. At the same time, since the Ministry of Finance feels obliged to honour the dubious letters of guarantee issued by Tan Sri Chan Kong Choy despite a RM1.4 billion pending legal suit by PKA against KDSB, the bondholders will get paid their dues. Hence there will be no need for the lenders to sue Datuk Seri Tiong King Sing and KDSB to recover their outstanding loans.

The complete burden amounting to billions of ringgit is shifted to the hapless and helpless rakyat who are forced pay for the follies of the Barisan Nasional government, enriching KDSB and its shareholders while those possibly guilty of criminal breach of trust such as Tan Sri Chan Kong Choy gets away scot free. This is the perfect exemplification of a “people first” government.

7 comments:

Gunnfan said...

Tone, BN will eventually collapse under the weight of its accumulated scandals past and present. All Pakatan needs to do is; win little victories ala LGE in Penang and keep your powder dry. You time will come. And can you please get Azmin to play nice with Khalid ;)

donplaypuks® said...

YB

Is there something preventing DAP, PKR, PAS and affiliated NGO's from jointly filing a case and taking out an injunction against the Govt to stop them from paying $700 million of KDSB's bond debt?

The public have 'locus standi' to challenge the Govt on these brazaeny open fraudulent and revenue wasting croney deals

Go for it even if along the way the Judges and Courts 'pasang kaki!!"

I recall that in 1986 Lim Kit Siang took on Mahathir and UEM over the $800 million NS Highway contract awarded without open tender. The Govt was only saved by CJ Salleh Abbas when he made it 3-2 in favour of the crooked deal!!

While you are at it perhaps you may want to look at other crooked looking Govt deals, one for $500 million on over-priced trains and another for $9 billion re the Pahang-Selangor Water and Tunnel contract where $5.5 billion "extra" is being questioned, at Dr.Zul's blog at:

here

Check out the comments section on the $9 billion/$5.5 billion blowout!!

dpp
we are all of 1 race, the Human Race

KoSong Cafe said...

It can be perfect with the connivance of the government, otherwise each party should be suing those responsible according to their legal obligations.

Again, it showcases BN's habit of signing lop-sided agreements, plus unnecessary guarantees making us liable to the bondholders. Surely, the purpose was to benefit certain powerful figures or organizations and make the nation pay for it.

Anonymous said...

Cancerous Disease:- BENEFIT UMNO BN & CRONIES FIRST RAKYATS LAST OR NEVER

Kill the cancerous disease and the patient will survive, likewise get rid of the root cause and the Nation will survive and thrive.

It does not matter what they do because whatever they do will be to no avail. Like RPK said in London, it is no good attempting to treat the symptoms because it just simply will not work. It is the cancerous disease that should be treated. So therefore as long as UMNO is in the driver seat then absolutely nothing could be done. Before anything else, UMNO will first have to line their pockets, then their families pockets, then their cronies pockets and then whatever morsels left to the selected segment of the rakyat. So how much is enough? It does not matter how much natural resources Malaysia possess for come one day these resources will eventually be exhausted. Then what?

Be like Singapore one might suggest. But do our leaders have that mentality and maturity to do so? With the present government – not by an extra mile mate!

Now the UMNO BN Rogues will bankrupt the Nation’s Coffer and cut subsidies to rob the poor and to subsidize their rich crony Tycoons so that the benefits can go back to them on demand. All the poor rakyats were having a bad deal since 53 years ago with them in power not once did they not squeeze the Rakyats with taxes after taxes now they will try to impose GST 4% on all levels that will resulted in more than 16% taxes imposed on all ordinary basics consumers’ goods from materials Suppliers, manufacturers, wholesalers to retailers. Now they are trying to cut subsidies but they are not cutting back taxes but instead increased the taxes.

Also it was discovered that they have their cronies increased the prices of foods such as vegetables and fruits included, also they have allowed their cronies to increase the prices of all basic construction materials including cement and steel to further squeeze the Rakyats’ well being of a reasonable survival in these bad times. Also, cash rich GLCs like Petronas, Felda, Sime Darby, MISC, Bank Bumiputra, Renong etc. are not spared from being fleeced and while some became History as they no longer exist today ok???

ALL MALAYSIANS IRRESPECTIVE OF RACES ARE SUFFERING THE OPPRESSIVE RULE BY THE ROGUES OF UMNO BN AND WE ARE HOPEFUL THAT THERE ARE MORE RPKS WHO DARE TO EXPOSE & BRING OUT ALL THE WRONG DOINGS OF THE CORRUPTED LEADERS OF UMNO BN TO THE KNOWLEDGE OF THE WHOLE WORLD SO THAT ALL MALAYSIAN VOTERS WILL VOTE WISELY COME GE 13 AND BRING DOWN THE CORRUPTED AND OPPRESSIVE UMNO BN GOVERNMENT SOONEST POSSIBLE FOR THE FUTURE WELL BEING OF ALL MALAYSIAN CITIZENS AS THE COUNTRY’S RESOURCES WILL SOON BE DEPLETED IN NO TIME UNDER THE WASTEFUL AND CORRUPTED UMNO OFFICIALS MIS-MANAGING THE MALAYSIAN ECONOMY.

The war that was necessary to be fought by all Malaysians is the only war against corruption by UMNO Rogues and their oppressive rule by their using Police Force as their tools to suppress dissents ok?

This is necessary so the said Govt. Coffers will not be empty when the new PR Govt. took over from them come next GE, Malaysian Voters should know what is required to throw them all out then because future generations of Malaysians will suffer great poverty after Umno BN would have bankrupted the Govt. Coffers by then if there is no CHANGE OF HANDS AFTER DECADES OF MIS-MANAGEMENT OF THE ECONOMY AND HIDING THE DAMAGED DONE BY POSTING RECOVERY STORIES AND THE OVER-GLORIFIED NEM IN THE MSM FOR SHOW ONLY, HOW TO BELIEVE THE MSM WHEN WHAT THEY TRULY DID WAS TO TELL ALL SORTS OF LIES OR DISTORTIONS FOR THE UMNO BN GOVERNMENT IN POWER WHO CONTROLLED THEIR YEARLY RENEWAL PUBLISHING LICENCES.

WHAT IS THE POINT WHEN ONLY THE PM’S BROTHER CAN SPEAK HIS MIND WITH SINCERE HONESTY AGAINST NEP BUT THE WHOLE PACKS OF UMNO BN ARE ROTTEN TO THE CORE BEYOND RECOVERY OK, AS IT IS BEYOND HIS POWER NOR OF ANY GREAT INFLUENCE TO PRESS FOR ANY CHANGES IN THE COMPLEX MIRED PROBLEMS THIS NATION HAS BECOME EVERSINCE ???

Anonymous said...

I get tired seeing Pakatan making noises only over so many bad issues affecting the nation, no affirmative action gets done, so no resolve of problems.Stand up and be united press for action-sack the racists,arrest the robbers/gangsters,sue the empty big mouths....crying over spilled milk is not gonna make our nation better.STOP THE BLEEDING now!

Anonymous said...

They key to note is that Najib is reacting to crises after crises NOT setting the agenda and leading it. He & his team is going backwards. He is not leading the way and worst, it appears that those around him are setting the agenda. Its an eventuality he will be done. All it takes is one or two major problems like a scandal or a market slowdown and he is done.

Anonymous said...

YB Tony, Are you sure the PKFZ scandal is the only perfect scam under the Alliance/BN/UMNO's 53 years rule?