Selangor Govt’s controversial move upsets PKR leader

(The Star) – The Selangor Government’s controversial buyover of Talam Corp Bhd’s RM391mil debt has stirred an hornet’s nest in PKR.

A furious party secretary-general Datuk Salehuddin Hashim has despatched a strongly-worded e-mail to all PKR MPs and assemblymen in the state questioning why Mentri Besar Tan Sri Khalid Ibrahim has kept them in the dark over the move.

Some who read the e-mail told The Star that Salehuddin, who described the move as an old trick used by crooks in the corporate sector, wanted them to seek an answer from Khalid.

The State Assembly had on Nov 9 approved a supplementary budget of RM391mil for the state investment arm, Mentri Besar Incorporated, to buy over debts owed by Talam Corporation to several state agencies.

Talam is a major player in the Malaysian property sector, involved mostly in building affordable homes.

The RM391mil was owed to subsidiaries of Selangor Development Corporation (PKNS), Kumpulan Darul Ehsan Bhd (KDEB), Permodalan Negeri Selangor Bhd (PNSB) and Universiti Selangor (Unisel).

Some have also questioned the need for the state to buy over the debts, as the multiple transactions involved might incur additional costs including consultancy charges.

Rumours are rife that certain quarters were making a quick buck out of the “round-tripping” procedure involved in the buyover.

Explaining the procedure, former Selangor Mentri Besar Dr Mohd Khir Toyo said the Selangor Industrial Corporation (SIC), a subsidiary of PKNS, had been directed to buy over the RM391mil owed by Talam Corp to the state agencies.

SIC would then apply for a bank loan from CIMB to buyover the debts, and channel the funds to the state government as payment.

“The state government would then offer a grant of RM391mil to Mentri Besar Incorporated which will then channel the fund to SIC, which will later pay off its debt to the bank,’’ he said, adding that the SIC would also have to bear a RM70,000 daily interest until it settled the debt.

A PKR MP said the matter was never discussed during political bureau meetings.

“We view this matter very seriously as it is against the spirit of Pakatan Rakyat,’’ he added.

Selangor executive councillor Elizabeth Wong, when contacted, defended the move, saying the state had to buy over the debts from three government-linked companies which had failed to recover the RM391mil owed to them by Talam for a period spanning over a decade.

“Now, we are using the full might of the state to recover the amount due,’’ she said.

Wangsa Maju MP Wee Chee Keong, who said he was not aware of the e-mail, said Salehuddin should know what he is talking about as he had experience in the corporate sector.

State Umno leaders have also jumped on the bandwagon to criticise Khalid over the controversial buyover.

Dr Khir said companies listed on bourses usually resorted to the round-tripping tactic to give a false sense of profit to impress investors.

“But it is dangerous when a state government resorts to such a tactic, as they may have a tendency to overspend under the false impression that they had generated revenue,’’ he said.

Brushing aside Dr Khir’s claims, PKR vice-president Azmin Ali said SIC should be able to settle the RM391mil bank loan within 24 hours.