No bailout in Talam exercise, Selangor says in white paper

By Zurairi AR

November 20, 2012

SHAH ALAM, Nov 20 — The Selangor government today denied that the Talam debt-recovering exercise was a bailout, and reiterated that no public funds were transferred to the company.

In a white paper tabled at a state assembly sitting here, Selangor stressed that only RM420,000 was spent on the exercise, mostly for legal fees and bank interests.
“No payment was ever made to Talam, either in cash or goods, to acquire its land or property,” said a statement that accompanied the white paper, refuting accusations that the exercise was a bailout.

Accounting firm KPMG Transaction and Restructuring Sdn Bhd also outlined three steps for the state government to take.

Besides pursuing the remainder of the disputed RM500 million owed by Talam, KPMG recommended Mentri Besar Incorporated (MBI) to conclude all sales and purchase agreements, and collect cash from the sale of five plots of land.

The plots are in Bukit Beruntung, Bestari Jaya, Danau Putra, Bukit Jalil and Ulu Yam.

KPMG also recommended that Selangor continues to review the market value of the settlement assets to ensure that their value is comparable to market prices.

MCA Young Professionals Bureau chairman Datuk Chua Tee Yong had recently alleged abuse of funds by the Selangor government, claiming that Tan Sri Khalid Ibrahim’s administration had bought over Talam Corp’s RM676 million assets to clear the firm’s outstanding debts of RM392 million to three state subsidiaries.

He further claimed that the RM392 million in the supplementary budget approved by the state assembly in November 2010 to MBI was used by the state government for the alleged bailout.

But in retaliation, Pakatan Rakyat (PR) lawmakers have denied this and called out Chua for his allegedly “stupid blunder”, claiming that instead of bailing out Talam Corp the state government had only restructured the firm’s debts to ensure the monies were reclaimed in full.

In the state government’s previous replies on the issue, it was explained 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.

But after the state government fell to PR in 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.

The state government, through the state assembly, had in November 2010 appointed MBI to handle the collection of the RM392 million owed by the troubled property developer.

This ultimately made the MBI the point man to chase Talam Corp for the debts.

After months of negotiations, Talam Corp finally agreed to a full repayment of the 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.

According to state lawmakers, all settlement deals were fully disclosed to Bursa Malaysia and made publicly available on the bourse’s website.

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