The Manjung Town Council lost RM15,240,000-00 in the Sitiawan Sentral Project due to its failure to ensure that the Developer, Kinta Berkat Sdn Bhd performed the terms of the Joint Venture Agreement.
The land on which the Sitiawan Sentral Project was developed was a 6 acres plot belonging to the Manjung Town Council located in the heart of Sitiawan town. It was developed by Kinta Berkat Sdn Bhd into 52 units of commercial buildings.
In exchange for the land, Kinta Berkat Sdn Bhd was to pay and deliver the following to the Manjung Town Council.
- Build a branch office for the Manjung Town Council.
- Build 44 units of government staff quarters for the Manjung Town Council, and
- To pay Manjung Town Council RM4,790,000-00. The branch office has been built.
Kinta Berkat Sdn Bhd did not fulfil item (ii) and surrendered a 3-storey building valued at RM990,000-00 to Manjung Town Council as part payment towards item (iii) above leaving a balance debt of RM3,800,000-00 outstanding due to Manjung Town Council.
The 44 units of Government staff quarters were instead recently built and funded by the State Government through State Secretary Incorparated (a State Government Agency) at the costs of RM260,000-00 per unit.
Therefore, the total loss suffered by Manjung Town Council in the Sitiawan Sentral Project was RM15,240,000-00.
Particulars
- 44 units of staff quarters @ RM260,000-00 (44 x RM260,000-00) RM11,440,000-00
- Balance debt payable by Kinta Berkat Sdn Bhd RM 3,800,000-00
Jumlah RM15,240,000-00
Why was Kinta Berkat Sdn Bhd allowed to take the tens of millions of ringgit from the sales of the commercial units without fulfilling the terms of the Joint Venture Agreement? The Manjung Town Council was clearly negligent.
Action must be taken against the developer and against those in authority who allowed this loss to occur.