Jun 6, 2009


Kuala Dimensi has issued an ultimatum PwC to prove overcharging claims
Kuala Dimensi Sdn Bhd, a key developer in the troubled Port Klang Free Zone project, has issued a challenge to international audit firm PricewaterhouseCoopers (PwC) to justify claims that the company may have overcharged the government millions of ringgit in interest.

MCPXKuala Dimensi deputy group CEO Faizal Abdullah said that PwC has until 12 noon on Monday to release their figures to the press to justify its accusation against his company.

“In all fairness, we seek to know how they arrived to such a conclusion,” said Faizal in a press conference today in Petaling Jaya to rebut seven of 20 “key issues” mentioned in the PKFZ audit report.

“Surely they have the calculations in their files. Fax it to the media and let people see who has made the wrong calculation,” said Faizal.

He said that should PwC fail to do so, the allegation hurled at Kuala Dimensi would be a “blatant lie” and that the audit report can be rejected as “not credible”.

In the PwC report, it is stated that Kuala Dimensi “may have” overcharged the Port Klang Authority - which manages PKFZ - for interest of deferred payments amounting between RM51 million and RM309 million in connection with the purchase of the land used for the project.

Faizal defends sale of land to PKAAccording to the report, PKA has to pay RM1 billion at an interest rate of 7.5 per annum, and should be calculated each year on the remaining portion without compounding.

The report adds that based on the computations by Kuala Dimensi to PKA, the interest has been compounded on a six-monthly basis instead of non-compounded yearly basis.

"In addition, the agreement (between PKA and Kuala Dimensi) does not specify whether the yearly repayment should be applied against principal or interest.

"Depending on whether the yearly repayment is applied against interest or principal, interest has been potentially overcharged by between RM51 million and RM309 million," said the report.

Faizal said that the land deal between PKA and Kuala Dimensi in 2002 was agreed upon by both parties and explicitly stated in the sales and purchase agreement.

He said PwC had quizzed Kuala Dimensi on this in preparing the audit report, but at the time, the auditors never disputed the figures relating to the controversial deal. Kuala Dimensi is the turnkey contractor of the troubled PKFZ project.

According to the audit report, the project outlay is at risk of ballooning from RM1.9 billion in 2001 to RM12 billion in 2051./news/105314‘Report not gospel truth’Meanwhile, Faizal also accused both Transport Minister Ong Tee Keat and PKA chairperson Lee Hwa Beng of being too “eager” to release the report, instead of first verifying its contents.

“Sometime when I read the blog of the (transport) minister or the (statements) of PKA chairperson, it is as if they fail to understand the process.

“They took the report like the gospel truth. If the PKA chairperson or transport minister read the report, why didn’t they call us to explain and ask if (for example) if we have overcharged interest?” he asked.

“They should have called us first. Even if PKA calls us at 2am, we will come. Why didn’t they do that?” added Faizal, who was visibly irate at this point.

Faizal said that Kuala Dimensi was innocent of any wrongdoings but suggested that they were political victims and quoted the Malay proverb, “when two elephants fight, the mouse deer is trampled”.

The PKFZ audit was initiated by Ong shortly after being appointed transport minister last year, following intense pressure from opposition lawmakers.The project however took off under then Transport Minister Ling Liong Sik and later handed to his successor Chan Kong Choy, who was transport minister until March 2008.

Faizal also revealed that Kuala Dimensi will make good its threat of taking legal action next week in relations to the audit report, but refused to reveal which party would be sued.

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