Wednesday, August 04, 2010

Will Kong Cho Ha be Charged if Government Loses RM1.4 billion?

Datuk Seri Kong Cho Ha must be held ministerially accountable for decreeing payments to be made to PKFZ bondholders.

Over the past week, we saw the former president of MCA and former Transport Minister charged in court for allegedly committing fraud and misleading the Cabinet over the valuation of the land purchased for the purposes of building the Port Klang Free Zone (PKFZ). It is clear that in this case, the Cabinet will be feigning ignorance and innocence, and claiming that Tun Ling Liong Sik had committed the alleged crime on his own.

Last week, the current Transport Minister and MCA's appointed secretary-general had exercised his Ministerial powers and decreed the Board of Directors of Port Klang Authority (PKA) to make repayments to the bondholders amounting to RM372 million. This was despite the fact that the PKA Board was of the view that a payment of RM222.58 million should be witheld due to on-going dispute and litigation against the main contractor of PKFZ, Kuala Dimensi Sdn Bhd (KDSB) who raised the bond. The full payment was eventually made last Friday, on the 30th July 2010.

In the event where PKA were successful in its RM1.4 billion litigation and claims against KDSB, owned by BN Backbencher Datuk Seri Tiong King Sing, and PKA is unable to claim the necessary “refunds” from the latter, it will result in a huge loss of RM1.4 billion to the Malaysian government and its people, even without including any interest cost.

The question then is, who will be responsible for this loss of RM1.4 billion to the country? The Board of Directors, on advice of its lawyers have already made known its position that they are against making any payments to the KDSB bondholders pending the litigation outcomes, with the fear that the amount will be irrecoverable from KDSB once the bond has been paid even if PKA were to win their case in court.

Datuk Seri Kong Cho Ha has single-handedly made the decision to make this payment and he must be held ministerially accountable and responsible for this payment to the bondholders. Datuk Seri Kong Cho Ha must also clarify if he has made full and proper respresentation of the prevailing issues to the Prime Minister and the Cabinet before this decision is arrived.

Or has the Prime Minister and the Cabinet been misled as well by Datuk Seri Kong Cho Ha into believing that the Government has no choice but to make the payment, despite the various letters of undertaking given by KDSB to its bondholders where in the eventuality where there is shortfall of payment from the Government, KDSB will make up for such a shortfall?

Datuk Seri Kong Cho Ha has even refused to consider various suggestions to hold the payments due in escrow, to be made to the rightful parties only after the court case has been concluded. Such recklessness can only be interpreted as an attempt to bail out KDSB from its predicament when its bondholders exercises the undertaking which has been issued by KDSB, where KDSB will be forced to make the hundreds of millions in outstanding bond repayments.

If the Transport Minister has failed to brief the Cabinet of the pertinent points with regards to the bond and the on-going litigation against KDSB by PKA, and should PKA be unable to reclaim the RM1.4 billion fraudulently claimed by KDSB, then Datuk Seri Kong Cho Ha must be similarly charged in court like the former Transport Minister, Tun Ling Liong Sik for allegedly defrauding the cabinet and possibly even consipiring to cause massive losses to the Government of Malaysia.

Datuk Seri Kong Cho Ha must not evade accountability, and must immediately declare his willingness to take full responsibility for his actions in decreeing the payments to KDSB bondholders.
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