Pua: Talam forced to repay debts, not ‘bailed out’

By Clara Chooi, Malaysia Insider

 

KUALA LUMPUR, July 6 — DAP MP Tony Pua today picked apart Datuk Chua Tee Yong’s RM1 billion funds abuse allegation against the Selangor government, saying it was forcing Talam Corp to settle its RM392 million debt to the state instead of bailing the firm out.

Describing the accusation as a “stupid blunder” by Chua, Pua called on the Labis MP and other MCA leaders to withdraw their claims within 24 hours or have these further countered with more disclosures.

At a press conference here, the DAP publicity secretary revealed that Talam Corp’s RM392 million debt to three state subsidiaries had originally been incurred during Barisan Nasional’s (BN) reign in the state and was considered a “hidden debt” as it was never recorded in the three firms’ books.

Talam Corp, now known as Trinity Corporation Berhad, had then owed Universiti Selangor (Unisel) and Permodalan Nasional Selangor Berhad (PNSB) RM277 million as well as SAP Holdings — a subsidiary of listed company Kumpulan Hartanah Selangor Berhad (KHSB) — RM115 million, for a total of RM392 million.

Pua said when Pakatan Rakyat (PR) took over after Election 2008, the hidden debts were later “uncovered” and the state moved immediately to recover the monies owed by Talam Corp, instead of bailing out the firm as claimed by Chua.

He explained that the state government, through the state assembly, had in November 2010 appointed Mentri Besar Incorporated (MBI) to handle the collection of the RM392 million owed by the troubled property developer.
“Meaning,
the debts sit with MBI now. If they (MCA) want to say that we bought the debts, (then) we bought the debts from our own subsidiaries... we took over the debts from the state subsidiaries so that MBI will be the point man to chase Talam Corp for the debts,” he said.

Chua’s RM1 billion figure arose from an “elementary double-counting” error, said Pua.

After months of “hard-nosed negotiations”, said Pua, Talam finally agreed to make a “full repayment” of RM392 million to MBI in the form of cash and assets in two tranches — one on March 12, 2010 and the second, a month later on April 9.

All settlement deals were fully disclosed to Bursa Malaysia and made publicly available on the bourse’s website, where Pua said he obtained the documents for today’s press conference.

According to Talam Corp’s announcement on Bursa Malaysia, the first settlement package saw it pay MBI RM12.67 million in cash, RM44.724 million in property without charge or encumbrances, and RM285,737 million in property with charge or “encumbered”.

Citing printed copies of the announcement distributed to the media today, Pua explained that the RM285.737 million in assets had come with RM101.767 million worth of encumbrances, which he said meant that the properties were still tied to outstanding bank loans.

When the assets were disposed of by Talam Corp to MBI, the latter would automatically inherit the encumbrances attached to the properties, he added.

As such, Pua said the net value of the first settlement package paid to MBI, minus the encumbrances, totalled RM241.367 million.

In the second settlement package, Talam Corp had disposed of RM345.6 million worth of assets that came attached with encumbrances or outstanding loans worth RM195 million.

“Therefore, the net value of the settlement was only RM150.6 million,” Pua said.

Following both the settlements (RM241.4 million and RM150.6 million), Talam Corp had effectively repaid its RM392 million debt to MBI, Pua concluded.

“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?” he asked.

Chua, MCA’s Young Professionals Bureau chairman, had on Tuesday alleged that the Selangor government had bought over Talam Corp’s RM676 million assets to clear the firm’s outstanding debts.
According to Talam Corp’s announcement on Bursa, the sum total of properties disposed off to MBI, including the encumbrances, was RM676 million.

“Datuk Chua must enlighten me as to how taking RM676 million worth of property with a net asset value of RM379.2 million equals bailing out Talam Corp? We are taking assets away, not giving them more assets,” Pua pointed out.

The son of MCA president Datuk Seri Dr Chua Soi Lek also alleged that the state government had used the RM392 million approved to the MBI in 2010 to help the troubled firm, and that the total amounted to his purported RM1 billion bailout scandal.

But Pua dismissed Chua’s RM1 billion figure as “elementary double-counting”, pointing out that, “if I paid RM40,000 for a RM80,000 car, it does not make it a RM120,000 scandal — its either a RM40,000 con job or a RM80,000 con job.”

“They (Chua and MCA leaders) 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,” he said.

As a “teaser”, Pua said his press conference tomorrow would disprove Chua’s latest allegation that the Selangor government had overpaid for a piece of land with “complications” by RM42 million.

“Based on the same standard applied by Tee Yong that we had overpaid Talam Corp for the land, the fact of the matter is the complete reverse — Selangor underpaid for the value of the land. We benefitted more,” he said.

Pua, however, refused to disclose further details, saying he would rather give MCA the opportunity to retract its allegations.