MB: Selangor to invite five accounting firms to review Talam deal
UPDATED @ 09:22:11 PM 11-07-2012
SHAH ALAM, July 11 — The Selangor government will commission five local accounting firms to review its debt restructuring agreement with Talam Corporation and clear the air over claims of funds abuse by MCA, Mentri Besar Tan Sri Khalid Ibrahim announced today.
Khalid insisted this afternoon at the Selangor state assembly that his administration had not relieved Talam Corp of its debts as claimed but instead had recovered monies that the troubled property developer owed the state’s subsidiaries.
“But if we want to explain all this one by one, it will take time,” Khalid said, referring to a sheaf of documents in front of him, which he said details the debt recovery exercise.
“We will let the professionals handle the evaluation,” he said.
Khalid said the five “internationally-acclaimed” firms, to be announced soon, will conduct an independent review of Mentri Besar Incorporated’s (MBI) agreement with Talam Corp and that its findings will be presented to the next assembly sitting, along with a white paper on the deal.
This, he added, would show how MBI had recovered the RM392 million debt from Talam Corp, now known as Trinity Corp, and put an end to the allegations of funds abuse by MCA leaders.
“We will show our returns and to show how this effort was managed, we will also invite the former accountant-general of Malaysia Datuk (Mohd) Salleh (Mahmud) to ensure that the review done by these accounting firms are free from MBI’s interference,” he said.
When prompted by several assemblymen in the august House for a full disclosure on the state’s agreement with Talam Corp, Khalid insisted on leaving the matter for the five invited firms to reveal.
Speaking at a press conference later, Khalid explained that the debt recovery exercise had been a two-step process, starting with “debt recognition” and followed by the collection, through cash payments and asset acquisition.
“First, we had to identify the debts and recognise the debts. Meaning, Talam Corp agreed that those debts were truly what they owed the state government,” he said.
Upon recognising the debts, said Khalid, the state assembly had then handed over the duty of debt collection to MBI, an incorporated state institution which he chairs. Also on MBI’s board are the State Secretary and State Financial Officer.
The MBI later struck a host of signed agreements with Talam Corp on how the firm would repay its RM392 million debt, he said.
“I would like to show you these agreements but there are too many... there is not enough space here,” Khalid told reporters.
He stressed that in each of Talam Corp’s agreements in its disposal of assets to MBI, the firm was made to sign underwriting asset documents as a guarantee to ensure that the state would not be short-changed.
“Meaning in whatever asset they disposed to us, if it cannot achieve the underwritten value, they must find other assets to dispose of to ensure this value is reached.
“So Selangor will not suffer any losses here because of the guarantee from the underwriting,” he explained.
When asked why the state had failed to produce the white paper on Talam Corp in 2010 as promised, Khalid noted that there were some delays in the final stages of the debt recovery process, such as the transfer of land ownership and other issues.
“A white paper must be a completed paper. That is why we did not produce it. But since everybody wants it, we will produce the white paper along with the report from the professionals,” he said, adding that the state would begin “talking” to the five accounting firms by next week.
Khalid would not reveal details of the state’s plans to sue MCA but later told party leaders to “continue to speak” on the issue.
“They can continue, we will continue to ask these firms to do their work. Eventually, even you would get tired of listening to this Talam issue,” he said, referring to the reporters.
MCA Young Professionals Bureau chairman Datuk Chua Tee Yong had recently alleged that Khalid’s administration had bought over Talam Corp’s RM676 million assets to clear the firm’s outstanding debts of RM392 million to three state subsidiaries.
He had further claimed that the RM392 million in the supplementary budget approved by the state assembly in November 2010 to the MBI was used by the state government for the alleged bailout.