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RM4m paid for ‘useless’ hillslope land

 | August 7, 2012

MCA's Chua Tee Yong now alleges that the Selangor government could have overpaid RM1.2 million for shares in an inactive company which owns the hillslope land.

HULU SELANGOR: The Selangor government may have paid an additional RM1.2 million more for shares in an inactive company in its debt-recovery exercise with Talam Corporation Bhd (now Trinity Corporation), MCA’s Chua Tee Yong alleged today.

Chua, who is Agriculture and Agro-Based Industries Deputy Minister, said with this latest exposé, the Selangor government’s alleged purchasing of overvalued assets would amount to between RM107 million and RM165 million.

Previously, Chua revealed in the Talam deal overvalued land that is underwater or in forest and ecology zone; overvalued land that is ex-mining pond; overvalued office units and retail lots that are vacant; and overvalued Class 3 and 4 hillslope land.

This included lands at Bestari Jaya (RM42 million to RM100 million]; Danau Putra (RM57 million); Menara Pandan office lots (RM1.9 million); and hillslope Ulu Yam land (RM5.3 million).

Explaining this latest issue while on a site visit here with the media, Chua said that the state, via Menteri Besar Incorporated (MBI), had acquired 60% shares in Ulu Yam and Country Club Sdn Bhd for RM4.2 million in 2010.

The remainder 40% is held by a subsidiary of Selangor-owned Kumpulan Hartanah Selangor Bhd (KHSB).

Chua claimed that the Selangor government had apparently bought the 60% shares at an overvalued price as a valuation done by one Sulaiman & Co valued the company’s only asset – a 199-acre in Ulu Yam – at RM5 million.

The valuation was initiated by KHSB in July 2011.

“Thus 60% of the shares in the company whose asset is only hillslope land would only be worth RM3 million… compared to when Selangor accepted 60% shares at RM4.2 million, there is a depreciation of RM1.2 million,” he said.

Lack of transparency

Chua said this was on top of the fact that the company had not commenced operation and has liabilities of RM807,000.

He also said that the land was Class 3 and 4 slope, which means above 25 degrees and above 35 degrees respectively.

(The only development allowed for Class 3 and 4 is national infrastructure projects. In 2009, the state government froze all development plans on Class 3 and 4 land pending new guidelines on hill slope development.)

Chua said that the Selangor government should have consulted KHSB before accepting the 60% shares.

“Did the Selangor government conduct an independent valuation carried out by the state valuer?”

“Was an independent financial and legal due diligence carried out?”

“From this deal, we can see there is lack of transparency and competency by the Selangor government for accepting overvalued shares of a company whose only assets is hillslope land and having liabilities of RM807,000. This is serious as the state is using taxpayers’ money,” he said.

Since July 3, Chua had been embarking on a series of exposé alleging that the state government had possibly used some RM1 billion in public funds to bail out Talam.

First, Chua had alleged that the state lied about fully recovering its RM392 million debts when it “did not”.

He had questioned why in addition to a RM392 million supplementary budget passed in the State Legislative Assembly in 2009, an additional RM676 million worth of assets were purchased from Talam to further assist the then ailing company.

Chua subsequently showed that several of the questionable assets obtained from Talam, in the debt- recovery exercise, were bought at overvalued prices.


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