Tuesday, April 18, 2006

Selangor GLC Scandal: Why was PISB/Tajuk Construction wound up?

Perangsang International Sdn Bhd (PISB), known later as Tajuk Construction Sdn Bhd, the main contractor which delayed the Matrade Building project and liable for damages of RM159.8 million, was wound up on January 18, 2006 by its creditor, Angkasa Nusantara Sdn Bhd, for failing to pay on demand a judgment sum of RM239,468.60 within 3 weeks.

It is not unusual for a company in Malaysia to be wound up by its creditor for the said sum as section 218 of the Companies Act, 1965 provides that a company established under the Act shall be deemed to be insolvent if it is unable to pay a sum of Rm500.00 within 3 weeks of a demand by its creditor.

However, it smells fishy if one looks into the cronology of the events that led to the winding up of PISB/Tajuk Construction.

In his written reply to my question (above, in Malay language) in the Selangor State Assembly on 29.11.2004, Dato Seri Dr Mohd Khir bin Toyo, Selangor Menteri Besar, told the House that PISB was a subsidiary of Kumpulan Darul Ehsan Berhad (KDEB), the state government investment arm, through its subsidiary, Kumpulan Hartanah Selangor Berhad (KHSB).

He further said that PISB was sold to Tajuk Modal Sdn Bhd for RM2.00 on July 19, 2004. By acquiring PISB, Tajuk Modal would have to absord the PISB losses in 2003 in the sum of RM283,977.00, liability of RM7,648,577.00. The advatage of the acquisition was that Tajuk Modal would be able to utilise the tax loss and to take over the Class "A" Contractor license.

There are 3 questions arise in Khir's answer.
Firstly, a search on PISB/Tajuk Construction conducted at the Companies Commission of Malaysia on March 7, 2006 showed that as at August 25, 2005, the whole of 14.5 million paid-up shares was taken up by SAP Holdings Berhad (SAP), a subsidiary wholly owned by KHSB and not Tajuk Modal a 2-dollar shell company owned by 2 Chinese man!
That means PISB was not sold to Tajuk Modal but to SAP, another subsidairy of KHSB on July 19, 2004 and had its name changed to Tajuk Construction on November 29, 2004.
Did Khir Toyo misled the House on the sale of PISB? If he did, why did he need to do so?
Secondly, if, either SAP or Tajuk Modal, was so confident and prepared to take up the losses of RM283,977.00 and liabilities of RM7,648,577.00 in exchange of the Class "A" license and the tax loss, why couldn't it make an effort to raise the relatively small sum of RM239,468.60 to pay the creditor in order to avoid the winding-up proceeding?

Thirdly, after the sale of PISB/Tajuk Construction, PISB/Tajuk construction was still operating its business at Lot 1A, Level 1A, Plaza Perangsang, Shah Alam, which is the registered and business address of KDEB, KHSB and all the other subsidiaries.
This is an indication that the sale of PISB/Tajuk Construction was not a transaction at arm's length. It seems to be a disguise to confuse the public.
Was the winding-up of PISB/Tajuk Construction a major part of a scheme by the Selangor state investment arm, KDEB or KHSB, :-
(i) to avoid the liability to pay the Federal Government the penalty and damages of RM159.8 million as a result of the delay in the Matrade Building project; and
(ii) to dump all debts and losses of the Selangor state GLC into PISB/Tajuk Construction in order to have a clean bill of health for the rest of the Selangor state GLC.
Let's hear from the state government.
(GLC- Government linked companies)
(Click the enlarge all pictures)

1 comment:

Bangsa; malaysia. said...

That's creative accounting and slick manipulation to blur the wanton mismanagement. It has been so well refined in Malaysia that the rakyat think these flers are so hardworking tackling complicated issues on their behalf and for their benefit.

This is exactly how the NEP has been hijacked to benefit the UMNOputras. what is sad is the ubiquity and magnitude of these malpractices in the government.

if these do not stop we as rakyat have to be more vocal to stop it. first step is at the polls.