Media statement by Tony Pua Kiam Wee in Kuala Lumpur on Friday, 6^th July 2012:

Datuk Chua Tee Yong's RM1 Billion Mega-Blunder

Datuk Chua Tee Yong had claimed that the "PR Selangor Government must explain to the Rakyat the acquisition on the RM676 mil worth of assets and the usage of RM392 million allocation which total to the RM1 billion questionable deal."

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's elementary double-counting.

But that's not important. What is important is whether the Pakatan Rakyat (PR) Selangor government had abused tax-payers' monies to bailout financially troubled company, Talam Corporation as alleged by Datuk Chua.

He alleged that "this is a clear cut case of bailout whereby PR Selangor Government used the Rakyat money to help a listed company by buying a lot of its assets."

So did the PR Selangor Government "acquire RM676 million of assets to bailout Talam"?

Datuk Chua is confused. He is aware that Talam owes the Selangor government RM392 million. If that is the case, then why would the Selangor government "acquire" RM676 million of assets from Talam?

What the Selangor government did was to have Menteri Besar Incorporated (MBI) legislated to takeover the debts Talam owed to UNISEL (RM255 million), Kumpulan Hartanah Selangor Bhd (RM115 million) and Permodalan Negeri Selangor Bhd (RM22 million). This means that MBI will do the collection for the above debts amounting to RM392 million directly from Talam.

These debts were not previously accounted for, and no efforts were made by the respective Selangor subsidiaries to collect these debts. Hence to ensure that all outstanding debts due to the state government are collected, Tan Sri Khalid Ibrahim himself has made it his personal mission to ensure that the Selangor rate-payers will not be shortchanged.

So how did MBI collect the debt?

After months of hard-nosed negotiations, Talam had agreed to make the full payment of RM392 million in the form of cash and assets, in 2 tranches. The first tranche was in 12 March 2010, while the second was in 9 April 2010. The settlement of Talam debt to MBI was fully disclosed in Bursa Malaysia and the related financial documents are publicly available on the above dates on Bursa's website.

In summary, Talam paid RM12.7 million in cash and settled the balance in property assets. Were we shortchanged by the assets?

Some of these assets still had outstanding balances with the bank. This means that if the state were to take over these assets, the state will need to "settle" these outstanding loans. In this case, MBI took over RM676 million of assets from Talam, which had RM266.2 million of loans outstanding and RM30.5 million of other fees to be paid. Hence the net value accruing to MBI for these properties after deducting the loans and fees, will be RM379.2 million.

By adding RM379.2 million to RM12.7 million, Talam would have settled in full its debts of RM392 million. This means that MBI had collected RM392 million worth of additional cash and assets as part of the exercise.

I would like to ask Datuk Chua who is not only a trained accountant, but a former Chief Financial Officer of a Government-linked Company, where is it in the above debt recovery exercise has the rakyat's money been abused?

Datuk Chua in his statement, accused that "...the PR Selangor Government has acquired RM676 mil of assets to bailout TALAM." Datuk Chua must enlighten me as to how taking RM676 million worth of property with net asset value of RM379.2 million bailing out Talam? We are taking assets away from Talam, not giving them more assets!

If I were Talam, I would be mighty upset because under the BN reign, I didn't need to pay back a single sen to the state government agencies, but under PR, I'm forced to give up hundreds of millions of assets in order to settle my debts.

Datuk Chua also said that "from this deal, TALAM walked away with cash over RM266 mil which is paid to Talam bankers. The exact figures I have not worked out yet." I can only assume that Datuk Chua hasn't "worked [it] out yet" because he hasn't got a clue what is going on.

In fact I'm completely stunned because surely he could have worked out that even though Talam managed to "settle" the RM266 million outstanding with their bankers for the loans they took for the properties, Talam gave up RM676 million worth of assets to MBI in return? And based on the Mathematics we learnt in school, I believe RM676 million is far larger than RM266 million.

Datuk Chua attempted to confuse the public even further with his own blunder and confusion by arguing that "instead of just recovering RM392 mil debt, PR Selangor Government bought up to additional RM284 mil worth of assets from TALAM to assist the company."

Conclusion

I will conclude that Datuk Chua failed to differentiate between "buying" assets and "taking over" assets as part of a debt recovery exercise.

I strongly suggest that Datuk Chua and his team of Selangor MCA leaders, including MCA Selangor Youth Chief Dr Kow Cheong Wei, MCA Selangor Public Services and Complaints Chairman Dato' Theng Bok and veteran comeback politician, Datuk Yap Pian Hon, who stood with him over these baseless and frivolous allegations, to publicly apologise for misleading the Malaysian public with their inadequate understanding of corporate finance.

They should stop making a complete fool of MCA and themselves. This "advice" includes their latest claim that the Selangor Government had "overpaid" for a piece of land from Talam.

They have 24 hours to repent and withdraw their baseless accusations. If not, I'll hold another press conference same time tomorrow to shred to pieces their allegations that Selangor had "overpaid" for land in the above debt recovery exercise, whether it is RM41 million or more.

* Tony Pua Kiam Wee, DAP National Publicity Secretary & MP for Petaling Jaya Utara