Kong ordered full payment of disputed deal, says Hwa Beng
KUALA LUMPUR, April 27 — Datuk Lee Hwa Beng denied today advising Datuk Seri Kong Cho Ha to make full payment to Kuala Dimensi Sdn Bhd (KDSB) when the former was still Port Klang Authority (PKA) chairman as it would have completed a deal still disputed in court.
Kong had said it was only “partly true” he used his powers as transport minister under the Port Authority Act in 2010 to continue payments to the turnkey developer in the Port Klang Free Zone (PKFZ) scandal which may cost taxpayers RM12.5 billion from an initial RM1.1 billion.
The MCA secretary-general told The Malaysian Insider yesterday PKA “actually advises us on what is the amount outstanding” for repayment each year.
But Lee (picture), who chaired the regulator for Malaysia’s largest port from March 2008 to March 2011, told The Malaysian Insider today the board had not advised the minister to go ahead with full payment but instead decided to suspend it.
“There were four payments due in 2010. Our lawyers Skrine & Co said the first three were okay but not the fourth, for New Additional Development Works (NADW), which we are suing KDSB for.
“This RM223 million would have completed the deal, so our lawyers advised us not to as it is still being disputed in court,” he said.
Lee had earlier said Kong invoked his ministerial powers under the Port Authorities Act in 2010 to reverse the PKA board’s decision to withhold payment to the special purpose vehicle (SPV) representing KDSB bondholders.
This was in response to his successor as PKA chairman Datuk Teh Kim Poh insisting that the continued payments made under his and Kong’s watch were “just a continuation” from Lee and former Transport Minister Datuk Seri Ong Tee Keat’s stewardship.
Kong took over from Ong in June 2010 after the latter was dropped from the Cabinet following his ouster as MCA president that year.
Lee said today that Kong had verbally told PKA to reverse its decision not to pay KDSB.
The former Subang Jaya assemblyman said he then insisted that the instructions come in black and white but the first letter issued was by the Transport Ministry’s secretary-general.
A second letter was then issued by Kong but instructions were unclear and PKA only released the payment after a third letter came from the transport minister, he added.
The PKA is suing KDSB RM1.6 billion for uncompleted work in the PKFZ project which was initially tagged at RM1.1 billion after it was mooted by then Transport Minister Tun Dr Ling Liong Sik in 1997 but more than quadrupled to RM4.6 billion by 2007.
A position review by top accounting firm PricewaterhouseCoopers revealed in 2009 that the total cost including interest from debt repayments could reach RM12.5 billion.
Since December 2009, six individuals have been charged in court including ex-MCA president Dr Ling and his successor as transport minister, former MCA deputy chief Tan Sri Chan Kong Choy, who are both accused of lying to the Cabinet.