Tuesday, July 24, 2012

Selective quotes from the Selangor State Legislative Assembly hansard makes Chua Tee Yong a bad taste MP

MCA Member of Parliament of Labis, Johore, also Deputy Agricultural and Agro-based Industry Minister, Chua Tee Yong has been raising questions on a round-tripping exercise of Selangor State Government (SSG) to recover a hidden debt of RM392 million owed by Talam Corporation Berhad (now named Trinity Corporation Berhad) for the past ten years.

His major accusations circulated around SSG overpaid Talam Corporation on several land deals. Two examples are raised so far as below:
(1) An overpayment of RM57.3 million to Talam for a piece of land in Danau Putera and;
(2) An overpayment of RM42 million for another piece of land in Bestari Jaya.
Where is the White Paper?

He also claimed that some of these lands are submerged under water and have very little economical value. He also pushed for SSG to release a white paper as promised to be released in end of 2010. This is based on an extraction of Selangor State Legislative Assembly meeting on 13th July 2010 when Selangor Mentri Besar Tan Sri Khalid Ibrahim replied a supplementary question by BN State Assemblyman for Paya Jaras, YB Dato’ Ir Muhd Bushro Mat Johor.

Chua Tee Yong has been hammering Tan Sri Khalid Ibrahim since day one on his delay in issuing a White Paper, which he promised in the State Legislative Assembly, would be issued by end of the 2010.

If Tee Yong pays more attention to read what he has, I am sure he will be able to read this line from the hansard:
“Untuk ini, kertas putih yang dikehendaki mestilah dan ada agreement-agreement yang kita lakukan.”
Selangor State Legislative Hansard, page 20
Unfortunately, Tee Yong seems to be unable to understand this sentence as he keeps blaming SSG for its failure to produce the White Paper, knowing very well that not all transactions were concluded then in the end of 2010. This is even when Talam Corporation issued a circular to all its shareholders via Bursa Malaysia only on 15th March 2011, which is less than three months away from December 2010.

How on earth could SSG or Tan Sri Khalid Ibrahim issue a White Paper when Talam at that point of time had not even got the approval from its shareholders? Or is Tee Yong selectively quoting from the Hansard to justify his accusations?

The question of over-payment

Tee Yong also worries that taxpayers’ monies will go to drain when there are two records of overpayment from SSG to Talam. He also questions if SSG manages to fully recover RM392 million from Talam.

Tee Yong will definitely get his full answer if he has fully read the Selangor State Legislative Assembly hansard on 13th July 2010.

Tan Sri Khalid Ibrahim was saying in the hansard in page 19, that
“….dan dengan tanah-tanah itu kita beritahu Talam kalau kita tidak dapat lagi jumlah akhirnya tiga ratus Sembilan puluh dua juta kita ambil lagi tanah Talam yang lain.”
This means that if assets from Talam fail to yield RM392 million for the state government, the state government then has the right to take other lands owned by Talam to recover the remaining debt.

Tan Sri Khalid Ibrahim also said in the state legislative assembly the same day that,
“oleh kerana Kerajaan Negeri sekarang ada ketelusan saya juga dari semasa ke semasa mengedarkan harta-harta yang kita dapati dan berapa pula pendapatan daripada harta-harta ini dan pendapatan ini mesti jangan kurang daripada tigas ratus sembilan puluh dua juta ringgit. (Hansard, page 19)”
This means whatever revenue generated from the disposal or sales of any Talam’s properties held by SSG, the value shall not be less than RM392 million, which is the money owed to SSG by Talam.

In other words, the issue of over-payment (which is the result of subtracting gross consideration value from professional valuation) does not arise because Talam has already undertaken to settle the debt in full although the state government eventually may consider selling these lands based on gross development value to secure higher prices.

This is particularly true when Tan Sri Khalid Ibrahim stated in the State Legislative Assembly, also on 13th July 2010, that
“kerajaan negeri bercadang untuk meluluskan program prmbangunan tanah tersebut bukan cara jual tanah kosong tapi tanah yang sudah ada rancangan pembangunan building approval plan. Dan apabila kita jual, kita jual berasaskan gross development value. (Hansard page 19)”
Bursa Malaysia and Securities Commission has no role to play?

Talam issued a circular to its shareholders on 15th March 2011 named “Proposed settlement of debts amounting to RM391,986,473 by Talam Corporation Berhad to Menteri Besar Selangor (Incorporated) by way of disposal of properties and cash payment.”

Talam claimed that all exercises under the proposed settlement are endorsed and approved by Bursa Malaysia and Securities Commission. Chua Tee Yong refuted this claim and disagreed by saying that debt-restructuring of a public listed company (PLC) does not require approval from Bursa Malaysia and Securities Commission.

If what Tee Yong says is true, then he should explain the meaning of Clause 9.33(1) under Chapter 9 “Continuing Disclosure” of Bursa Malaysia Main Market Listing Requirements as below:
“9.33 Issuance of circular or document

(1) Where a listed issuer announces a corporate proposal (including a transaction) to these Requirements a circular or document is required to be issued to its securities holders in relation to such corporate proposal -

(a) the said listed issuer must submit the draft circular or document to the issue the circular or document as the case may be, in accordance with these Requirements as soon as possible and in any event not later than 2 months from the date of the announcement or the date the last approval necessary for the corporate proposal is obtained from the relevant authority, whichever is the later; and

(b) where the draft circular or document is submitted to the Exchange pursuant to subparagraph (a) above, the circular or document must be issued immediately upon receipt of the Exchange’s confirmation that it has no further comment and in any event not later than 14 market days after receipt of such confirmation.”

He should explain the meaning of this sentence which appears in most of the valuation reports by chartered valuation surveyors to Talam “we refer to your instruction to ascertain/access the market value of the…..for submission to Bursa Securities Malaysia by Talam Corporation Bhd for approval of its circular…”
So can we still now say that Bursa Malaysia has got no role to play in this exercise?

Land submerged under water has no economical values?

I do not have any idea what MBI plans to do with any land submerged under water which MBI recovers form this exercise but Tan Sri Khalid Ibrahim’s reply in the Selangor State Legislative Assembly throw a lot of limelights on various proposals that SSG received since then.

This is what he said in the Selangor State Legislative Assembly on 9th November 2010:
“…kita masih lagi menimbang keupayaan ini sebab kita dapati sekarang projek di Bukit Beruntung mula menarik ramai aaa...aa...pemaju-pemaju termasuk pemaju daripada Sime Darby melalui TESCO yang membina apa yang dipanggil, aaa...a...centre..pusat untuk menyimpan aaa...aaa..barang-barang yang akan dihantar ke pusat-pusat Tesco di seluruh negeri, negara, that mean gudang , gudang simpanan dan juga kita dapati juga pembangunan aa...golf ...city yang ingin membangun lebih daripada 50 lubang golf yang dibuat oleh Kumpulan yang menjayakan, apa yang dipanggil D...aaa...aa...D’Mines...saya tengah... Lombong...saya nak tulis Lombong tak boleh, Mines, saya tengah fikir apa nama, aaa...jadi kita belum buat keputusan lagi. Kita belum buat keputusan tapi yang penting ialah mengambil alih tanah-tanah ini. Malangnya, saya tak nak cerita panjang tentang ini, tanah-tanah ini dulu tanah kerajaan , kita bagi pada TALAM, tapi kita ambil balik, kita ambil balik dan tanah ini sekarang sudah dikuasai balik oleh Kerajaan Negeri (Hansard page 18-19).”
Let me remind Chua Tee Yong that The Mines was developed by Tan Sri Lee Kim Yew from the world largest excavated tin mine in Serdang. Let’s not forget Sunway Lagoon, also successfully redeveloped by Tan Sri Jeffrey Cheah’s Sunway Group from an ex-mining pond. Smart guys can increase the gross development value of mining ponds into gold mines instead of fishing ponds.
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