07 July 2012

Talam gave Selangor RM9.1mil discount...

tony pua pc on talam 2The Selangor government managed to acquire 13 parcels of land from Talam Corporation Bhd at a RM9.1 million discount as part of a debt restructuring deal, contrary to claims by MCA that the move was a bailout.

This was based on the difference in a private firm’s valuation of the land, which amounts to RM685 million, against the state’s valuation, which amounts to RM676 million.

At a press conference today, DAP publicity chief Tony Pua said this information was stated in Talam’s circular to shareholders on March 15, 2011.

“Instead of criticising the Selangor government, MCA should be praising (Menteri Besar) Khalid Ibrahim for his astute business sense,” said Pua, who is also Petaling Jaya Utara MP.

Pua said that the circular was available on the Bursa Malaysia website which is freely available, suggesting that MCA did not do adequate homework. The private property valuation firm used by Talam is Mitra Valuers & Property Consultants Sdn Bhd.

Although the integrity of property valuation’s can be questioned, Pua said that the state makes its assessments with help from the Valuation and Property Services Department, under the federal government’s Finance Ministry.

On Monday, MCA central committee member Chua Tee Yong alleged that the state government had bailed out Talam with RM266 million of public funds.

‘Look at the numbers’


Chua, a trained accountant, claimed that instead of paying its decade-old debt of RM392 million owed to several state agencies, the company had made a handsome gain.

“They say they collected money from Talam, but from what I see it is Talam getting the cash,” said Chua, who initially claimed that the bailout involved RM1 billion.

It was later established that the RM266 million were actually liabilities to the bank, which the state government had to undertake as the new landowners.


NONEFollowing this, Chua had zeroed in on his complaint to just one parcel of land in Bestari Jaya, which he claimed the state government had “overpaid” by RM41 million.

Again referring to the Talam’s circular to shareholders, Pua conceded that this appear to be the case because the firm’s valuation was RM139 million as opposed to the state’s valuation of RM181 million.

 

Although he is unable to explain this anomaly, Pua said that for the purpose of the debt restructuring exercise, the total valuation for all 13 properties surrendered by Talam should be taken into consideration.

However, in the case of Bestari Jaya, Pua agreed that the market value for the land appeared to be higher than the state’s valuation.

BN gave discounts, we didn’t

He showed reporters an offer letter to the state government to purchase the land at RM90,000 per acre, which is more than the RM80,000 per acre valuation by the state.

“The best judge of market valuation is what people are willing to pay for... It is a good deal, because state has undervalued the land. It is worth more than what we ‘paid’ for,” he said.


azlanThe full offer letter, dated November 2011 and prepared by lawyers, was sighted by Malaysiakini. Pua made the document available to the press with certain names redacted.

In summary, Pua said that the state government did not look into individual parcels of land and were only interested in all 13 plots.

“A bailout is when you gain. In this case, Talam lost RM392 million. What is important is... that (assets) is with the state government. The people did not have to pay.

“Before 2008, Talam was never made to pay the state. After we found out about the debt, Talam was made to pay,” he said.


On the contrary, Pua pointed out that the previous BN administration had given huge discounts to its cronies who engaged in land deals, as pointed out by Sekinchan state assemblyperson Ng Suee Lim.- malaysiakini


Chua: MCA is not afraid

video

 Talam for Dummies...

 “Confusing” probably describes most of our initial attempts to get to the bottom of what the deal was between Talam Corporation and Selangor. With a little diligence, clear thinking and attention to detail however, most mysteries can be unravelled and articulated efficiently.

This article attempts to explain in easy to understand terms the background and context of this issue, how Selangor recovered the debt owed to it by Talam, and how this debt recovery differs from the bailouts we have seen at the federal level.

In the beginning

The story begins in the late eighties and early nineties, with an engineer and project manager who worked in Selangor state subsidiary PKNS - one Chan Ah Chye.

This man later goes on to form Talam Corporation, and before long - possibly due to close connections with the ruling elite in Selangor, then headed by BN menteri besar Muhammad Muhammad Taib - becomes a major player in the Selangor property and development scene.


azlanOver time, an extremely large amount of state land is alienated to Talam, who basically gets it for free. A strong imagination is not required to speculate in whose pockets any resulting profit eventually ends up.


Talam’s modus operandi seems to be to pledge this land to the bank in exchange for huge loans, which they then use to finance their development and profit making projects. In essence, since they got the land free, they have successfully achieved money for nothing (it is uncertain as to whether “chicks for free” were involved).


The ‘wise’ businessmen of that era believed in the dictum of never using your own money when you can use someone else’s. This heavy lending continued to characterise Talam’s business approach, and their loans consistently kept getting bigger and bigger.

Tumbling down


Of course, no student of recent economic trends is unfamiliar with the concept of a bursting bubble. The financial collapse of the late nineties brings Talam’s debt-ridden house of cards crashing down. An overgearing of loans and inability to service them halts various half-completed projects, rendering them idle, half-built ruins.

INONEncredibly however, this does not prevent Talam and their political patrons from altering their basic modus operandi.


In 2001, under BN menteri besar Khir Toyo (right), three parcels of land are alienated by Selangor to Talam via their subsidiary Maxisegar Sdn Bhd, who undertakes to construct Unisel’s campus at an estimated cost of RM750 million.


It will probably come as no surprise that Talam failed to complete this project. By September 2006, the company had been classified as an affected company under Practice Note 17 (PN 17), indicating dire financial straits.

New sheriff in town


In 2008, when Khalid Ibrahim assumes the menteri besar’s post, he inherits a situation in which Talam owes the state and its subsidiaries (among other creditors), a great deal of money. Urban legend has it that when Talam was called in to explain why they have never endeavoured to pay their debts, the sheepish reply given was, “No one ever asked us to.”

NONEThankfully for the citizens of Selangor, there was a new sheriff in town. Corporate finance is not only an area of expertise for Khalid (left) - it is a passion. 

With great gusto, he set out to solve this problem, and recover that which was owed by Talam to the people of Selangor.


The problem was undoubtedly challenging, but after some work and careful strategising, a plan was set into motion. The end goal was simple: to leverage the assets still held by Talam to repay the debt Talam owed to the Selangor and its state subsidiaries.

The technical nitty-gritty


Making this happen was a technically complicated process that required considerable financial acumen.


The summary is this: firstly, the debts that were owed by Talam to Selangor state subsidiaries were properly booked and accounted for - something that, very suspiciously, had not been done before. Once these debts were acknowledged by all parties, the debts were consolidated and transferred to one state subsidiary - Menteri Besar Incorporated (MBI), which was then responsible for collecting the debts from Talam in the form of land and cash.

money ringgit malaysia wang duit currencyThe rest of this section explains how this was done. It is a boring and complex explanation, but I list it here for the record and for those interested.


Talam owed RM392 million in debt to three Selangor state subsidiaries: KHSB, PIYSB, and PNSB. After acknowledging and booking these debts, the next step was to have another state subsidiary, Selangor Industrial Corporation (SIC), purchase these debts from the other three companies.


A loan from CIMB Bank of RM 392 million was given to SIC to complete this purchase. In November 2009, the state exco and legislative assembly both approve a grant of RM392 million to MBI, who then use the funds to purchase the original consolidated debt from SIC. SIC then uses those funds to pay off their CIMB loan.


The end result is as simple as the transaction itself is complex - without any major or excessive transactional expenses, Talam now owes the same amount of money to just one state subsidiary, instead of the original three.


Restructuring and successful collection

It is important to note that at no point are funds transferred from taxpayer monies to Talam. Funds have instead only been transferred from one pocket of the state to another.

NONEThis differs wildly from federal bailouts of corporations like Indah Water Konsortium, MAS, or the Putra/Star LRT, where taxpayer money was injected directly into companies that had probably lost untold amounts via mismanagement, corruption and plundering.


The transfers in the Talam debt restructuring allowed for a structure in which there is a clear acknowledgement and accounting for the RM392 million owed by Talam, and a single company for them to pay it to.

The story does not end there.

Another extremely important milestone in this tale is that MBI has in fact already succeeded in recovering all RM392 million in debt owed by Talam. For those who would like to keep score, this recovery came in two forms.


RM340.88 million was recovered via acquisition of land and assets: 1,322 acres of land in Bukit Beruntung worth RM150.28 million, 2,264 acres of land in Bestari Jaya worth RM105.3 million, 400 acres of land in Ulu Yam and 60% equity in Ulu Yam Golf & Country Resort worth RM22.2 million, 134 acres of land in Danau Putra worth RM52.1 million and five office units in Menara Pandan worth RM11.1 million.


The remaining RM51.12 million was collected in cash: RM12 million from sales of land in Puncak Jalil, RM5 million in cash assignments from EON, RM7.68 million in payments by Unisel for earthworks, RM9.04 million from the sale of 25.94 acres of land in Bukit Beruntung, and RM17.4 million from sales of 218 acres of land in Bestari Jaya.


Go ahead, count it - it's all there.

Facts trump hype - again

How can we summarise this? For more than a decade under BN, one corporation owed the state hundreds of millions of ringgits.

Within a year or two of taking over, Khalid managed to collect on these debts, instantly increasing the amount of money available to spend on welfare programmes throughout Selangor.

Scandal?

Yes, it’s a scandal that Talam was allowed to get the free lunch it did under BN, and it’s a scandal it took this long for to create the change in government that succeeded in cleaning up the mess.



INONEt would be insulting to suggest that this article is titled specifically in the hopes that Chua Tee Yong (left) would take the time to carefully peruse the facts within. 

Nevertheless, perhaps he may find the exercise beneficial in his longer term efforts to maintain what little credibility he has left.


Said credibility is shrinking at about the same rate at which he is reducing the amount of money claimed to be ‘misused’ by Selangor - from RM1 billion, to RM260 million, to RM42 million. Before long, he may have to measure in sen instead.


Perhaps Chua fancies himself a Rafizi Ramli. What he fails to understand however, is that Rafizi’s exposes are not just all about ‘glamorous’ press conferences and big numbers. Behind every expose is a ton of hard work and solid research.


Behind Chua appears only to be blind ambition that extends far beyond ability, and a shameful mainstream media that think that hype can overturn facts.- Nathaniel Tan, malaysiakini


Kerajaan Selangor ambil alih Talam, bukan ‘selamatkan’ kroni...

Kerajaan negeri Selangor tidak “menyelamatkan” Talam Corporation Bhd seperti mana yang biasa dilakukan oleh pimpinan Barisan Nasional bagi menyelamatkan kroni mereka, sebaliknya ‘mengambil alih’ aset milik Talam untuk membolehkan syarikat itu membayar semua hutangnya.

Setiausaha Publisiti DAP Kebangsaan, Tony Pua, menjelaskan bahawa tuduhan MCA amat melesat kerana tidak faham perbezaan di antara belian aset dan mengambil alih aset.

“Mengapa perlu Kerajaan Selangor menyelematkan Talam sekiranya Talam sendiri berhutang RM392 juta dengan kerajaan negeri? Kerajaan negeri mengambil alih aset dari Talam dan bukannya memberi aset kepada mereka”.

“Saya ingin menyoal Datuk Chua Tee Yong, seorang timbalan menteri MCA, yang bukan sahaja akauntan terlatih tetapi bekas Ketua Pegawai Kewangan GLC, sila buktikan di manakah dakwaan salah guna wang rakyat dalam isu ini?” soal beliau.

Menurut Pua, apa yang kerajaan negeri lakukan ialah mengambil alih hutang Talam terhadap UNISEL melalui Perbadanan Menteri Besar (MBI) sebanyak RM255 juta, kumpulan Hartanah Selangor Berhad sebanyak RM115 juta dan permodalan Negeri Selangor Berhad RM22 juta.

“Ini bererti, MBI akan mengutip hutang berjumlah RM392 juta secara terus dari Talam. Tidak ada usaha yang dibuat oleh anak syarikat kerajaan negeri ini untuk mengutip hutang-hutang tersebut.


“Jadi untuk memastikan hutang dikutip, Menteri Besar Tan Sri Khalid Ibrahim sendiri berusaha untuk memastikan pembayar cukai Selangor tidak diperdaya,” jelasnya.

Talam telah membayar RM12.7 juta secara tunai dan menyelesaikan baki tertunggak melalu asset hartanah, kata Pua.

Katanya, setelah beberapa bulan melakukan rundingan, Talam telah bersetuju untuk membuat bayaran penuh sebanyak RM392 juta melalui bayaran tunai dan aset dalam dua bahagian.

“Bayaran bahagian pertama ialah pada 12 Mac 2010 dan kali kedua pula pada 9 April 2010.”
Penyelesaian Talam kepada MBI ini telah diumumkan di Bursa Malaysia manakala dokumen berkaitan boleh didapati di laman web Bursa.

Pua yang juga Ahli Parlimen Petaling jaya Utara menjelaskan dalam sidang medianya di Ibu Pejabat DAP, sebahagian dari aset-aset ini masih mempunyai tunggakan pinjaman dengan pihak bank.


Sekiranya kerajaan negeri ingin mengambil alih aset ini maka kerajaan negeri perlu menyelesaikan tunggakan pinjaman ini.

“Dalam perkara ini, MBI telah mengambil lebih dari RM676 juta asset dari Talam yang mempunyai tunggakan pinjaman berjumlah RM266.2 dan RM30.5 juta fee untuk dibayar.

“Jadi, jumlah bersih yang terkumpul untuk MBI selepas pemotongan pinjaman dan fee ialah RM379.2 juta,” katanya.

Dengan menambah RM397.2 juta kepada RM12.7 juta, jelas Pua lagi, Talam akan menyelesaikan keseluruhan RM392 juta hutangnya. Ini bermaksud, MBI telah mengutip sebanyak RM392 juta tunai dan asset tambahan.

Katanya, Chua dan pimpinan MCA yang lain perlu berhenti dari memperbodohkan diri mereka sendiri dan parti.

Mereka juga perlu memohon maaf secara terbuka kerana telah mengelirukan orang awam akibat tidak cukup faham mengenai kewangan korporat, tambah beliau. – Roketkini.com




cheers.

No comments: