Selangor GLC Scandal: Why was the attempted voluntary winding-up?

I queried the question of why did SAP or Tajuk Modal allow PISB to be wound up by a creditor for a sum of RMRM239,468.60 when it was able and willing to absorb the losses of RM283,977.00 and liabilities of RM7,648,577.00 in exchange of the Class "A" license and the tax loss last week.

Of course no one had been be able to give an plausible explanation.

Why? Because before the winding-up petition filed by PISB/Tajuk Construction's creditor, Angkasa Nusantara, came up first time for hearing on November 24, 2005, PISB/Tajuk Construction itself had made a statutory declaration of its inability to continue business by reason of its liabilities on October 25, 2005 and commenced a voluntary winding-up by calling for a creditors' meeting on November 22, 2005.

Let's look at the chronological events as follows:-

December 31, 2003- PISB suffered losses of RM283,977. with liabilities of RM7,648,577.00 and having an unascertained amount of damages and penalty claim by the Federal Government for the delay in the Matrade Building construction for which the amount had later been announced by the Minister of Works to be RM159.8 million.

July 19, 2004- PISB was sold to Tajuk Modal Sdn Bhd for RM2.00.

November 19, 2004- PISB changed its name to Tajuk Construction Sdn Bhd

December 31, 2004- PISB/Tajuk Construction failed to submit its accounts for audit. Until the date of winding-up, no audited accounts for the year ended December 31, 2004 was produced.

October 25, 2005- PISB/Tajuk Construction declared its inability to continue business by reason of liabilities.

November 22, 2005- Creditors' meeting.

Leaving aside the creditor's winding-up petition filed by Angkasa Nusantara, the whole episode of the sale of PISB to Tajuk Modal until the winding-up proceedings seemed to be a pre-planned scheme for the purpose of clearing the liabilities of the Selangor state investment arm at the expense of the creditors, the biggest being the Federal Government.

Who had been fooled? The Selangor state government and Kumpulan Hartanah Sdn Bhd can no longer keep mum on the issue.

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)

Matrade Building: Another RM160 million burnt to ashes

(Click to enlarge picture)

Works Minister, Dato Seri Samy Vellu, was reported to have said in the Star on February, 26 2006, when he visited the site of the Matrade Building that,

"PISB was told to pay liquidated damages (LAD) or late delivery charges of RM41,750 per day for 2,276 days from the termination date... that legal action was being taken against PISB to pay the RM95mil owed in LAD and RM64.8mil as cost for the additional repair works."

PISB (Peransang International Sdn Bhd) was a subsidiary solely owned by Kumpulan Perangsang Selangor Bhd (KPS), the Selangor state government investment arm that recorded a pre-tax loss of RM97,904,000.00 for the year 2005.

However, a search conducted at the Kuala Lumpur High Court Division revealed that PISB, which had its name changed to Tajuk Construction Sdn Bhd on 29.11.2004 after it was disposed of to Tajuk Modal Sdn Bhd for RM2.00 on 19.7.2004, had been wound up by Angkasa Nusantara Sdn Bhd on 18.1.2006, 39 days before Samy Vellu told the people that legal action would be taken to recover damages from PISB!

This is, so far, the biggest joke of the year where the minister was talking about suing a company legally no longer in existence. Another RM159.8 million had been burnt to ashes.

Samy Vellu must explain to the people who had been fooled in this Matrade episode, Samy Vellu or the people? It is either Samy Vellu who had been fooled by his officers or the people who had been fooled by Samy Vellu.

Second water contamination in Selangor Maju

Selangor hit the headline again today for the wrong reason, the second raw water contamination within 2 months causing the Semenyih water plant closed and disrupting water supply to thousands of households in Selangor.

Dato Seri Dr Mohd Khir Toyo, Selangor Menteri Besar, should tell the people if this is the phenomenon of a developed state as he proclaimed last August.

18-month suspension without pay begins

(Khir Toyo, the happiest man in the state assembly during my suspension)

I received confirmation from the DAP Headqaurters that the Selangor State Assembly had stopped paying my allowance and stripped off all my other privileges as a state assemblyman from March, 2006.

My 5-meeting-day suspension which tentamounts to one year as the assembly only sit for about 5 to 6 days a year began from 25.4.2005. Subsequently, the Committee of Privilege imposed an automatic extension of 6-month suspension after the one-year suspension which has just begun.

After the the 6 months, if I refuse to apologize in a manner acceptable to the House, there will be another extension of 12-month suspension. That means it is 30 months all together, setting a new record as the longest suspension in the Commonwealth legislatures.

I reproduce herewith my response to the suspension on 2.8.2005 after the Selangor State Assembly passed the motion proposed by the Committee of Privileges.

Press Statement by Teng Chang Khim, Selangor State Assembly Opposition Leader and State Assemblyman for Sungai Pinang on 2.8.2005

Preliminary

The unprecedented motion passed by the Selangor State Assembly yesterday adopting the proposal of the Committee of Privileges to increase the penalty against me for allegedly committing contempt of the State Assembly by throwing the Standing Order into a waste bin was the most shameful premeditated political assassination and vicious political vendetta against me by the Barisan Nasional.

This was not the first time that Barisan Nasional had tried to shut me up in the Assembly especially when I touched on the malpractices of the administration, the corrupt practices of the politicians and numerous scandals in the state administration under the leadership of the Menteri Besar, Dato Seri Dr Mohd Khir Toyo.

Throughout the years in the Assembly since 1995, I had been limited to speak for only 30 minutes in the capacity as the Opposition Leader in my first term from 1995 to 1999 and in the third term from 2004 even in the policy debates and the annual budget debates when my counterparts in the Penang State Assembly, for instance, had been allowed to speak without pre-set time limit over the years and the practice still remains.

Within the limited 30 minutes given to me, the Barisan Nasional backbenchers had also recently decided to interrupt me during my speeches by alleging that I had spoken out of the topic even during the policy and budget debates when by convention everything under the sun could be raised by the assemblymen participating in such debates. In every such incidents, the Speaker of the House, Tan Sri Onn Ismail, would blindly adopt their objection especially when I touched on the malpractices of the executive and the corrupt practices of the Barisan Nasional leaders.

During the 1999 budget session, I was even assaulted by the Barisan Nasional backbencher, Dato Zakaria bin Deros, in the Assembly lobby adjacent to the Chamber. The incident was certainly more serious than throwing the Standing Order into the waste bin. However, since he was a Barisan Nasional backbencher, no action was taken against him by the House and even a police report lodged by me did not give rise to any criminal prosecution against him.

The Incident

On 25.4.2005, before ending my frequently interrupted speech on the policy debate, I raised my objection against the Speaker’s decision to reject my ordinary motion in his Chamber without allowing the motion to be printed on the order paper (agenda) and circulated to all members of the House as required by the Standing Order. There is no provision under the Standing Order that empowers the Speaker to reject such motion in his Chamber. An ordinary motion can only be rejected by the House after it is tabled by the member giving due notice.

However, the Speaker had invoked a provision under the emergency motion which empowered him to reject an emergency motion in his Chamber to reject my ordinary motion. This was a total disregard and disrespect to the Standing order and blatant abuse of power by the Speaker.

The Speaker refused to listen and reason my objection and could only cling on the provision of the Standing Order that provided him the final say on the interpretation of the provision in case of ambiguity when in the present case there was clearly none as the provisions for ordinary motion in Rule 26 and 27 of the Standing Order were distinctly separated from that of the emergency motion in Rule 17 of the Standing Order.

As a symbolic act of protest, I threw a misprinted and void copy of the Standing Order into a waste paper bin after explaining my reasons for attempting to do so.

If my symbolic act of protest in throwing a misprinted and void copy of the Standing Order was an offence, then the total disregard and disrespect to the Standing Order and blatant abuse of power by the Speaker must be a sin. The House should pass a more severe sentence on the Speaker than on me.

The only reason that the Speaker was so adamant to prohibit me from moving the motion was that my motion proposed to seek for a no-confidence vote against the Menteri Besar, Khir Toyo, for the scandals in the indiscriminate clearing of forest reserve in U10 Bukit Cherakah, Shah Alam, the construction of the RM21 million bungalow houses for the State Executive members (EXCO) under the pretext of construction of quarters for the state civil servants, the alleged impropriety in the procedure of the land alienation in Gombak and allegations of corrupt practices of the Menteri Besar in a published book.

Multiple Jeopardy

It is a cardinal rule in the laws of this land that one should not be subject to double jeopardy which means one can only be tried and punished once for an offence committed by him. However, I had suffered multiple jeopardy for allegedly throwing the Standing Order into the waste bin.

The Speaker had repeatedly, for at least not less than 4 times, pronounced in the House in the morning session of the meeting on 25.4.2005 that I had been suspended for 3 days for the alleged offence. However, immediately after the meeting resumed in the afternoon, he announced that I had been suspended for 5 days. How could a judge pronounce an increased sentence on an offender for the very same offence? It is also a cardinal rule in law that a judge becomes functus officio after pronouncing the sentence which means he ceases his function as a judge when a sentence is passed. This is evidently another instance of disregard to rule and abuse of power by the Speaker.

Of course, under the Standing Order, if the Speaker deems the suspension of 5 days on a member is not sufficient, there is a provision under Rule 44(3) of the Standing Order that empowers the Speaker to name the member (in the Assembly meeting, a member can only ordinarily be called by the name of his constituency he represents) and followed by the motion from the frontbenchers to suspend that member for a period of time exceeding 5 days. This procedure was not complied with. Thus, the increased suspension of 5 days was null and void.

Inquiry of the Committee of Privileges in breach of the rule of laws and rule of natural justice

The subsequent motion by the State Exco member, Dato Tang See Hang, to refer me to the Committee of Privileges was also defective as it was not seconded by any other Exco member before it was tabled for debate and decision. I had noticed it when I was watching the proceeding via the circuit television at the lobby of the Assembly. I raised it in my preliminary objection when ordered to put up a written representation by the Committee of Privileges. A copy of the motion sent to me by the Committee of Privileges in their letter dated 27.6.2005 also did not indicate that the motion had been seconded. A draft copy of the Hansard sent to all the members on 26.4.2005, for which any amendment to it must be made within 14 days from the date thereof, also did not indicate that the motion had been seconded before it was put up for debate and decision.

The Committee of Privileges did not give any attention to my objection because it obviously did not refer to the copy of the motion that the committee sent to me and the draft Handsard that circulated to all the members which indicated that the motion was not seconded. The Secretary of the Assembly, Bakhtiar bin Hussin, sought to explain in the committee meeting that draft Handsard was amended by the seconder of the motion, Dato Ch’ng Toh Eng.

However, it could be easily noted from the covering letter of the draft Handsard circulated to all the members on 26.4.2005 that any amendment to the draft must be made within 14 days thereof, namely, by 10.5.2005. The Committee of Privileges had its first meeting on 24.6.2005 and its letter ordering me to submit a written representation was sent out on 27.6.2005. By 24.6.2005, the committee should have had the knowledge of the alleged amendment by Ch’ng if it really existed and thereby sent a copy of the seconded motion to me but yet only the unseconded copy was sent out to me. That means there was actually no amendment to the unseconded motion as at 26.6.2005. The sequence of events clearly showed that the Secretary of the Assembly had had the draft Handsard tailored only after I raised the preliminary objection in breach of the rule and procedure.

The Secretary of the Assembly further sought to explain to the committee that at the time when Ch’ng attempted to second the motion, 4 microphones were switched on simultaneously and the camera was still on Tang, the proposer, when Ch’ng seconded the motion and as such the camera did not turn in time on Ch’ng. Bakhtiar attended the meeting of the committee in his capacity as the Secretary of the Committee and therefore he should not be allowed to give statement in such a manner without calling Ch’ng and the cameraman or the technician to testify in the inquiry of the committee. His statement evidence is only a piece of hearsay evidence.

Besides the video camera recording the whole proceeding of the Assembly, there was also audio recorder to record the proceeding on which the Handsard recorder relied on to transcribe the speeches verbatim in the Assembly. Both the video and audio recorder were not produced in the inquiry of the committee to verify my preliminary objection.

The Committee of Privileges through its letter dated 27.6.2005 together with the unseconded motion ordered that I shall put up a written representation for their consideration within 7 days.

I put up a preliminary objection citing 2 reasons, firstly, that the motion was not seconded and secondly that there was no provision under the Standing Order that empowered the Committee of Privileges to order for written representation without calling me to appear before the committee. I had stated clearly that I would put up my defence after the committee had dealt with my preliminary objection.

The Committee of Privileges did not reply to my preliminary objection but instead proceeded to deliberate on the charge against me. I am surprised that the State Legal Advisor, Datin Paduka Badariah bt Hassan, had advised the Committee of Privileges that my objection was groundless, without first calling for proper evidence to verify, and that I did not use the opportunity offered to put up my defence. Even a chambering student would realize that this is obviously an utter disregard of the rule of laws and rule of natural justice.

It’s most shocking that the Committee of Privileges, being a committee set up by the state legislature, did not even conduct a proper hearing to decide on the charge against me. The minutes of meeting showed that not even a witness was called and not a piece of evidence was adduced to prove the charge against me. The unseconded motion at best was only a charge against me. The alleged Standing Order that I threw was not even tendered. In short, no inquiry was actually held. The committee deliberated on the matter without taking any evidence. The highest law making body of the state itself did not even adhere to the basic rules and procedures.

Besides, there were many other defects and irregularities in the whole proceeding as evident from the report put up by the Committee of Privileges. The committee met on 24.6.2005, 7.7.2005 and 26.7.2005. The entire report of the committee was dated 26.7.2005 but the minutes of the first meeting was only prepared and signed by the Secretary on 27.7.2005, one day after the entire report was ready. This first minutes of meeting was approved by the second meeting held on 7.7.2005, 20 days ahead of the date when the first minutes was prepared and signed! Even the third minutes of meeting was prepared and signed on 26.7.2005, one day before the first minutes of meeting was prepared and signed.

The most shocking part is that the committee had meted out the penalty at its meeting on 7.7.2005 and subsequently the third meeting was called to increase the penalty on 26.7.2005. But the final proposal on the penalty had already been signed by all the members of Committee of Privileges on 7.7.2005!

Numerous breaches of rules, procedures, and crystal clear defects in the whole episode have irresistibly pointed to one and the only one conclusion that it was a Barisan Nasional conspiracy to mount a political assassination against me at all costs to shut the opposition out of the Selangor State Assembly. It is most shameful for the Barisan Nasional to make the Selangor state legislature now a laughing stock of the world. It is the ugliest episode in the history of the Selangor State Assembly.

Bandar Puteri Klang owners have their website and blog

Emulating the Bandar Botanic house owners, the Bandar Puteri Klang Action Committee has also put up their own website to highlight their plight over the house defects and the flood. In addition, they have also started their blog.

This is an important move immediately after the meeting of the house owners on April 9 when an action committee was set up to garner the support of their fellow owners in the joint effort to seek redress from the developer.

Bandar Puteri: Another Bandar Botanic

The new housing estate, Bandar Puteri Klang, was sealed off by flood from the Taman Sentosa entrance on Sunday morning, April 9, when I drove there to meet the house owners over their woes on the defective houses built by Malayanpine Sdn Bhd, a company related to the conglomerate, IOI Bhd. Their plight had been highlighted previously on January 15 when I first visited the place.

It was a coincidence that it rained cats and dogs on Sunday morning, since as early as 2.00 a.m., and the water flowed into the houses since 2.30 a.m. The water had not subsided when I passed by Taman Sentosa and I had to turn back to Kesas Highway to make a u-turn at the Klang-Banting junction in order to enter Bandar Puteri from the highway since the developer had yet to build the ramp and flyover from the Kota Kemuning direction as promised long ago.

I wrote to IOI in January and requested their prompt action to resolve the problems arised, however, despite intervention from Klang Municipal Council (MPK), they seems to be lackadaisical.

A 14-member action committee formed on Sunday led by Sdr Hariharan will compile all the complaints on house defects and public amenities and will fix an appointment with the President of MPK to hand over a memorandum.

A website on Bandar Puteri is also being constructed emulating the website put up by the house owners in Bandar Botanic, Klang as part of their struggle to fight for their rights as consumers and taxpayers.

Police will have to say "no" to ombudsman?

The government is now proposing to set up an ombudsman to investigate complaints against the authorities, including the ministers, as reported in the Star today.

This proposal reminds us of the Independant Police Complaint and Misconduct Commission (IPCMC) which draws objection from the police officers on the ground, among others, that it will demoralize the force.

Logically and on principle, the police officers and their associations that object the establishment of IPCMC should now openly oppose the setting up the ombudsman as it will demoralize all the government officers and the ministers. Or the police is going to say that since the ombudsman is going to target at all government officers, then it is perfectly alright?

Let's see what Tan Sri Bakri Omar, Inspector-General of Police, has got to say.

Don't lie, Rahman Palil

With the Menteri Besar standing by him, Dato Abdul Rahman bin Palil(picture), defended himself against the bankruptcy proceeding and the question of propriety of him acquiring the land. The Star today reported as follows:-

At a press conference yesterday, Abdul Rahman explained that he had purchased the land from the state government through Agmal Development in his capacity as a businessman, although he was the Sementa state assemblyman then.

Anyone, even with the minimum knowledge of land law, would know that the state government does not sell land. The government only alienates land to applicants. If it were perfectly alright for him to apply for land, why did he need to "purchase" the land from the government through a private company owned by a third party?

As ruling party state assemblyman in the District of Klang, I believe Rahman was also a member of the Development Committee in the Klang District which dealt with land applications within its local jurisdiction. Did Rahman sit in the meeting that recommend, support or approve the land application by Agmal Development?

If he did, then the fact, as disclosed in Zarinah's case, that he had pursuaded Agmal Development to apply for that piece of land and he would in return be given 60% of the company's shares upon approval of the application, would certainly render him liable for an offence under the Anti Corruption Act 1997.

Again, the state government does not, and cannot, sell land under the National Land Code. So, don't lie, Rahman.

Khir Toyo should get ACA to investigate Rahman Palil and cases alike

Dato Abdul Rahman Palil, Selangor state exco member, had been served with a bankrupty notice and failed to comply with it within 7 days, thereby rendering himself liable for bankruptcy if the creditor proceeded with bankruptcy petition, as reported in the Berita Harian today.

The bankruptcy notice was pursuant to a court judgment which Rahman failed to satisfied. Rahman was supposed to pay the plaintiff a sum of RM311,295.35.

What is of public interest here is not the sum involved. It is the modus operadi of the application of state land through a private limited company owned by a third party with the assistance of the state assemblyman and government officer.

The plaintiff Zarinah claimed that Rahman had sent his representative and an officer in land office to pursuade her to apply for state land through her company, Agmal Development Sdn Bhd, in 1994. In return, when the land was alienated to Agmal, Zarinah would have to give 60% of Agmal's shares to Rahman, 20% to Rahman's representative, 10% to the officer's wife, and the remaining 10% was to be kept by Zarinah.

Agmal was later sold to another company and Zarinah was not fully paid her share and thus the legal suit which was won by Zarinah.

Dato Seri Dr Khir bin Toyo, Menteri Besar Selangor, should request the Anti Corruption Agency to step in and conduct an immediate and thorough investigation not only into Rahman's case but also into all other land application cases by companies for the past 10 years to ascertain how many such cases occured in Selangor. Rahman's case may be only the tip of the iceberg.

Blame yourself too, Khir Toyo

Selangor Menteri Besar, Dato Seri Dr Mohd Khir bin Toyo, now blamed the MPPJ for not informing him the status of PJX building, as he was reported in the Star today, to have said that:-

"I was not even told that the building was waiting for approval....it is sad that I had to learn about its status through a phone call at 6pm.”

Well, as the CEO of the government, Khir Toyo should not push all the blame to the president of Petaling Jaya Municipal Council (MPPJ). Just a phone call by any of the Khir's secretaries, when he was invited of officiate the launch of PJX, would enable them to find out the particulars of the proposed project. After all, they are paid by the taxpayers to do the job.

However, the question of pre-approval is still relevant, without which the developer, SBC Corporation, would not have had put up all over PJ the banners bearing the Selangor and MPPJ crests, a clear signal of an approval or pre-approval.

The question is, who gave the pre-approval?

Did Khir Toyo pre-approve PJX?

Dato Seri Dr Mohd Khir bin Toyo, Menteri Besar Selangor, launched the 34-storey supposedly iconic landmark for Petaling Jaya, PJ Exchange (PJX) , recently.

However, the pomp and ceremony came under fire last Friday when the PJ residents unleashed their anger over the project to be built on a parking lot yet to be converted from car park to commercial use.

In fact, the MPPJ has to consult the residents as amendment to the Petaling Jaya Local Draft Plan (RTPJ1) needs to be made before the developer can obtain approval and has its project launched.

What has happened to Selangor? Did Khir Toyo pre-approve the PJX project even before the conversion of status of land, before the plan from the developer, before consultation with the nearby residents, before the rejection by MPPJ and before the appeal by the developer to the State Authority?

Did Khir Toyo dump the all the requirements as provided by the Town & Country Act, 1976 to pre-approve the PJX? Otherwise, how dare the developer, SBC Corporation Bhd, organized the launch with banners bearing the Selangor and MPPJ crests.

Who is more powerful now? The Menteri Besar who seems to have the power to pre-approve the project against the law or the developer who seems to have very strong influence over the governments that it could even get the project launched bofore embarking on the first step in accordance with law?