Wednesday, July 18, 2012

PNSB - Spectacular Turnaround Under Pakatan Rakyat

Contrary to the frivolous allegations by Datuk Chua Tee Yong, the financial performance of Permodalan Negeri Selangor Bhd (PNSB) has improved by leaps and bounds under the Pakatan Rakyat leadership

Last week Datuk Chua Tee Yong has continued his crusade against the Selangor state government over the Talam “scandal” by alleging that the Selangor state wholly-owned subsidiary Permodalan Negeri Selangor Bhd (PNSB) was forced to take a supersized RM230 million loan to acquire land from Menteri Besar (Incorporated) as part of the Talam debt settlement agreement.

The question we are asking Datuk Chua and his merry men is what exactly is wrong with taking a RM230 million to acquire RM450 million worth of land assets, as audited, valued and recognized in the PNSB 2010 financial accounts? Where is the impropriety in that?

As highlighted in my press conference last week, and in case Datuk Chua isn’t aware, PNSB is a property development company.  It has to acquire land to develop and construct, in order to sell and make a return for the company.  It is no different from any property development company, privately held or publicly listed or government owned. Hence the acquisition of land for future potential development is the normal course of business for a property development company!  Where exactly is the “scandal” in the above transaction?

However, by thrusting PNSB into the limelight, it gave me an opportunity to review the financial performance of PNSB in detail.  To my pleasant surprise, the performance of PNSB has improved by leaps and bounds under the new Pakatan Rakyat leadership, beyond even my cautiously optimistic expectations.

A quick look at the profit and loss statements of PNSB showed that it made losses for 4 consecutive years since 2005 including the transition year of 2008.


However, as the above chart illustrates, that PNSB has been increasing its after tax profits (税后利润) 3 consecutive years in a row from RM8 million to RM23.4 million to RM28.4 million in 2009, 2010 and 2011 respectively.  This also means 2 consecutive years of record profits for PNSB in 2010 and 2011.

How is it that a Chartered Accountant (特许会计师) with qualifications from Royal Melbourne Institute of Technology (RMIT) (墨尔本皇家理工大学) can accuse PNSB of being forced to be indebted, when its financial turnaround (财政周转) from the days of Barisan Nasional has been nothing short of spectacular?

Datuk Chua accused PNSB of depleting its cash reserves (现金储备) which stood at RM76.0 million in 2008 and RM77.6 million in 2009.  However, the accounts of PNSB clearly showed a massive increase in cash reserves to RM167.0 million as at December 2011.

Datuk Chua accused the State Government of causing PNSB to increase its debts by RM230 million to acquire properties in Bukit Beruntung and Bestari Jaya.  However, Datuk Chua must certainly be impressed with the fact that the total assets (总资产) of PNSB has increased by leaps and bounds from RM111.4 million in 2008 to RM761.0 million and RM823.8 million in 2010 and 2011 respectively.

In addition, and probably more tellingly, the Net Tangible Assets (有形资产净值) of PNSB has improved by 17.7% from RM11.55 per share in 2009 to RM13.59 per share in 2011.

I have never been trained in accounts whether in school or in university and I don’t claim to be a qualified accountant or accounting analyst.  So, despite the initial rejection by Datuk Chua Tee Yong, I hope that he will reconsider the offer to debate the Talam debt “scandal” which he has raised, perhaps at least to teach me how to do proper accounting.

He should also take up the debate mantle to erase the damage to his reputation as a double-counting accountant and justify once and for all that Selangor under Pakatan Rakyat has committed a RM1 billion bailout of Talam Corporation, instead of him committing a billion ringgit blunder.

If Datuk Chua prefers a neutral venue instead of holding the debate at Wisma MCA, we can do it at The Star auditorium so that his allegations can be given maximum reach and coverage.

It would be a shame for him to turn down his very first invite to a public debate, unlike the MCA President Datuk Seri Chua Soi Lek who had courageously faced DAP Secretary-General Lim Guan Eng in live debates not once, but twice.

Once again, I very much look forward to Datuk Chua’s favourable reply.
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