KUALA LUMPUR (July 6): DAP leader Tony Pua on Friday gave a detailed account of the Talam Corporation debt recovery exercise in 2010 to show MCA leaders' lack of understanding on the issue, and threatened to expose more of their ignorance.
"If someone had done his homework, he wouldn't have made stupid blunders," he said. "I will conclude that Datuk Chua has failed to differentiate between 'buying assets' and 'taking over' assets as part of a debt recovery exercise," he told a press conference at the DAP headquarters here.
Pua, the DAP national publicity secretary, was referring to Datuk Chua Tee Yong's allegations that the Selangor government undertook a RM676 million "bailout" of Talam to repay a RM392 million debt owed by Talam to three state companies.
Chua, the MCA Young Professionals Bureau chief, has also alleged that the Pakatan Rakyat state government had overpaid Talam (now known as Trinity Corporation) to the tune of RM42 million when buying a piece of land in Bestari Jaya as part of the debt recovery exercise.
Pua gave MCA a 24-hour deadline to "repent and withdraw their baseless allegation", failing which he would proceed to "shred to pieces" MCA's latest allegation that the Selangor government had "overpaid" for the Talam land in Bestari Jaya.
|Pua (right) showing a document to DAP national legal bureau Gobind Singh Deo, who is also Puchong MP at the press conference.|
Pua, who said he was issuing the ultimatum in his capacity as Petaling Jaya Utara MP, suggested that Chua and his team of Selangor MCA leaders publicly apologise for misleading the public with their "inadequate understanding" of corporate finance.
"Firstly, from a mathematical standpoint, using RM392 million to acquire RM676 million of assets does not add up to a RM1 billion questionable deal. That is elementary double-counting," Pua said.
He said the Menteri Besar Incorporated (MBI) was legislated by the Selangor government to take over the debts that Talam owed to Universiti Selangor (Unisel) (RM255 million), Kumpulan Hartanah Selangor Bhd (RM115 million) and Permodalan Negeri Selangor Bhd (RM22 million).
"Talam agreed to make the full payment of RM392 million in the form of assets and cash in two tranches," he said. "The first tranche was on March 12, 2010 and the second on April 9, 2010.
In summary, Talam paid RM12.7 million in cash and the balance in property assets." Pua explained that some of these assets still had outstanding balances with the bank which meant that the state government would have to settle these loans if it took on the assets.
The March tranche involved RM241 million, of which RM12.7 million was in cash and the remaining RM330 million in assets. Part of those assets had RM102 million worth of encumbrances which, after being paid off, left the assets at a remaining value of RM228 million. The April tranche, meanwhile, involved five pieces of land located in Bukit Beruntung 2 and was valued at a total of RM346 million.
Of that sum, RM151 million was added to the previous RM241 million to pay off the RM392 million debt in full.
The remaining RM196 million was used by MBI to pay Talam's financiers to release the encumbrances on the assets (RM164 million) and to pay miscellaneous costs (RM30 million).
In a nutshell, MBI took over RM676 million worth of assets from Talam, of which RM266 million was used to pay off the outstanding loans and RM30 million for the payment of miscellaneous fees.
The remaining RM379.2 million in assets was then added to the RM12.7 million cash, thus amounting to the owed RM392 million. "If I was Talam I wouldn't feel like I have been bailed out because I gave RM676 million of my assets to pay off my debt," Pua pointed out.
"And I would be mighty upset because under the Barisan Nasional reign, I didn't need to pay back a single sen to the state government agencies."
Pua said all this information on the debt restructuring exercise was available on Bursa Malaysia and he didn't have to request any of it from the state government.
Chua's allegations also touched on unpaid debt to the three state subsidiaries and a "questionable" RM300 million that is being disbursed to the public as part of the "Selangorku Grant" programme.
Chua, who is deputy agriculture and agro-based industries minister, had asked from where the Selangor government had obtained the funds as he understood that none of the assets acquired from Talam had been disposed of.
In addressing the first of the two allegations, Pua pointed out that the debt has been transferred to MBI and it is now up to MBI to sort it out with its own subsidiaries. "Some of that debt, as I understand, has been paid off like in the case of Permodalan," he said.
"The others have signed agreements for the transfer to either be made over time or immediate... part cash, part assets and so on." He added that MBI was in the midst of realising the value of Talam's land before repaying the debts to these subsidiaries.
Pua wondered how Chua knew that the Selangor government had not disposed of any of the Talam assets. When asked if the assets had in fact been disposed of, he replied: "I believe they have but it is for the Selangor government to answer. I'm only here to clarify the debt restructuring exercise."
He, however, pointed out that if MBI had disbursed cash to implement the programme, then some of the cash must have been realised. "The state financial officer has to ensure that there is enough liquidity in the system. They can't just issue cash without having the cash," he stated.
While maintaining that he would only respond to the allegation of the Selangor government overpaying for Talam land at a press conference tomorrow, he hinted that the reverse was true. "We underpaid for it," he said. "But I will leave the details for tomorrow."