Malaysian Ministry of Finance run by a pukka criminal

Checks showed that the SPV company was only incorporated on 5th July 2012, a mere 9 months before being awarded the project. At the time of award and contract-signing, the SPV only had a paid-up capital of RM100,000. Source (pic): TTF

When performing a financial evaluation for a Request for Proposal (RFP), Jabatan Kerja Raya (JKR) requires that the bidder must show financial strength of at least three per cent of the contract value in order to qualify.

In the case of the Penang Undersea Tunnel and 3 paired-roads project, three per cent of the project’s RM6.34 billion declared worth comes to RM190.2 mil, almost all of which was not within the capacity or means of the SPV.

Is it not obvious that Lim aided and abetted a crime by getting the state administration to bend rules and break procurement guidelines?

Can we trust the Government of Malaysia to conduct any form of negotiation given that the ministry tasked to award and (or) negotiate projects is currently led by a crook who is accustomed to breaking the law?


SUBANG JAYA: The practice of awarding contracts and (or) signing sale and purchase agreements via direct negotiation by the ruling Pakatan Harapan is not something new.

On the 19thof May 2017, Lim Guan Eng, then the Chief Minister of Penang, told newsmen that the leasing of a 3ha plot of state land via direct negotiation brought the best “value for money.”

Lim, who frantically tried to defend the deal amid public backlash, said the sale would bring in RM2 bil in foreign direct investments (FDI) for a “medical city” that the DAP led government of Penang proposed to develop.


“Building affordable housing on that land doesn’t make sense.

“Isn’t having a private hospital with 1,000 beds and creating 2,000 jobs good for the state?” he said.

Actually, the fact that the deal was entered via direct negotiation was brought into the open by state NGO Citizens Awareness Chant Group adviser, Yan Lee.

Had Yan not raised the matter, Lim would have continued to lie to the people of Penang by saying that the DAP led state government only negotiated deals via open tenders.

Truth is, the majority of deals undertaken by the Lim administration was through direct negotiations or pre-negotiated Request for Proposals (RFPs).

Even then, Lim and his men bulldozed through certain contracts, agreements and negotiations despite knowing that the terms being discussed or those approved ran contrary to established regulations and (or) guidelines.

A case in example is the Penang Undersea Tunnel project that comes along with it the construction of three paired roads.

On the 1stof March 2013, the Special Purpose Vehicle awarded the project was announced winner following an RFP issued by the Lim administration.

At the time of award, the Penang state government denied claims that the SPV was under-capitalised, insisting that the company was backed by funds worth RM4.6 billion in paid-up capital.

The denial was issued by Dato’ Farizan bin Darus (Pengerusi Lembaga Perolehan Negeri Pulau Pinang) andDato’ Mokhtar bin Mohd Jait (Pengerusi Jawatankuasa Teknikal dan Kewangan) via the Penang state mouthpiece, Buletin Mutiara.

However, checks revealed that the SPV company was only incorporated on 5th July 2012, a mere 9 months before being awarded the project. At the time of award and contract-signing, the SPV only had a paid-up capital of RM100,000.

Worse, five month’s later, at the end of the SPV’s financial year, an audited account revealed that the company only had RM64,672 in cash-balance and a negative net-worth of RM7.96mil.

This means the statement issued by Farizan and Mokhtar via Buletin Mutiara was fake news and therefore a crime under MCMC rules and regulations.

The SPV’s audited statement also revealed that its auditors had raised the red flag amid concerns that the company’s financial figures were indicative of  material uncertainty and cast significant doubt that the company could continue to operate adequately.

Of even greater concern was the fact that the SPV’s parent company, which owned 99 per cent of the tunnel company, was incorporated on 22nd August 2011, a mere 19 months before its subsidiary was awarded to the SPV.

As of Aug 2012, the parent concern had a paid up capital of only RM300,000, a cash balance of RM199,532 and negative reserves.

Its auditors also raised a similar Emphasis of Matter and cast doubt that the company could continue to operate adequately.

Added together, the combined share-equity of both the SPV and the parent company was negative RM6 mil just 5 months after the project was awarded by Lim.

When performing a financial evaluation for a Request for Proposal (RFP), Jabatan Kerja Raya (JKR) requires a bidder to show financial strength of at least three per cent of the contract value in order to qualify.

In the case of the Undersea Tunnel, three per cent of the project’s declared RM6.34 billion worth came to RM190.2 mil, almost all of which was not within the capacity or means of the SPV.

Is it not obvious that Lim aided and abetted a crime by getting the state administration to bend rules and break procurement guidelines?

Can we trust the Government of Malaysia to conduct any form of negotiation given that the ministry tasked to award and (or) negotiate projects is currently led by a crook who is accustomed to breaking the law?


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