PETALING JAYA (Sept 6, 2009): The cabinet will be told on Wednesday that several parties, including former Port Klang Authority (PKA) general manager Datin Paduka O.C. Phang and turnkey contractor Kuala Dimensi Sdn Bhd (KDSB), were named as "possible conspirators" who have harmed or injured PKA in the Port Klang Free Zone (PKFZ) project.
Tiong King Sing O.C. Phang
Cabinet ministers will be given details of alleged deceit, fraud, double-billing and non-existent claims that were submitted for which payment was made with Phang's tacit approval.
The details of these and other irregularities are contained in the report by the Special Task Force which probed the PKFZ fiasco. According to those-in-the-know, the report heavily implicates Phang for losses incurred in the development of the free zone as she had breached her fiduciary duties and made questionable unilateral decisions detrimental to the PKA, without consulting the PKA board.
These findings appear to corroborate contents of a police report lodged by PKA chairman Datuk Lee Hwa Beng last month which accuses KDSB, its CEO Datuk Seri Tiong King Sing, Phang, BTA Architect and consultant Bernard Tan Seng Swee of "alleged conspiracy in the scandal".
The task force headed by Skrine & Co senior partner Vinayak Pradhan briefed Bukit Aman’s Commercial Crimes Division on its findings last week, following which police froze KDSB’s bank accounts totalling RM140 million last Friday.
On Friday, the task force and Inspector-General of Police Tan Sri Musa Hassan briefed Prime Minister Datuk Seri Najib Abdul Razak on the status of the probe.
According to one source, the task force also found that Phang had varied the interest rate of a contract without consulting the board which caused the authority to incur additional costs of RM49 million.
The task force found that Phang had placed the interests of KDSB above those of PKA and denied Government General Orders and Treasury guidelines on a variety of issues related to the project.
Phang had earlier been implicated in PriceWaterHouseCoopers’ (PWC) audit report released three months ago which pointed out, among others, that she had used the Common Seal without approval and had exceeded her authority of entering into contract exceeding RM50,000.
Police are investigating the activities of Phang, who is also alleged to have:
approved fraudulent claims from KDSB;
Accepted only advice favourable to KDSB, sidelining employees who consistently raised costing and budgetary concerns;
Refused to heed legal and professional advice of PKA officers in the appointment of quantity surveyors where she had also delayed the appointment of surveyors, while restricting their role;
Insisted that Perunding BE Sdn Bhd be appointed sole quantity surveyor although she knew that there was a clear case of conflict of interests since the firm was also appointed by KDSB for the same project;
Appointed Perunding BE without approval from the Finance Ministry;
Issued various consents and undertakings, as well as unilateral decisions committing PKA without approval from the board;
Committed PKA knowing very well that it was under budget constraints to fulfil its obligations although the government had agreed that PKA would fund the free zone from its own funds.
The task force findings accuse KDSB of:
Requesting a revision of the infrastructure plan for drainage and piping works claiming that it was unaware of the specifications of these works when the Legal Agreement had specifically spelled them out;
Double-billing PKA for drainage and piping works;
Billed PKA RM55.7 million for electrical infrastructure works which had yet to start;
It holds Tiong responsible as the “directing mind” behind KDSB by virtue of his position in KDSB, as well as being the substantial shareholder (70%) of holding company Wijaya Baru Holdings Sdn Bhd.
The task force, it is learnt, had also exonerated legal adviser Fazilah Surkisah Mohammad, saying there was no evidence of wrong-doing on her part.
On Wednesday, Phang shocked members of the Public Accounts Committee (PAC) hearing on PKFZ when she said she did not remember certain key issues regarding the deal and did not understand the basic financial term “cash flow projections”.
Tiong and KDSB meanwhile have filed defamation suits against Transport Minister Datuk Seri Ong Tee Keat, Lee and PwC.
Business jargon and memory loss
One finds it hard to stomach former Port Klang Authority (PKA) general manager Datin Paduka OC Phang’s claim of memory loss over certain pertinent issues during Wednesday’s hearing.
Even more so is her declaration that she does not understand what the committee meant by "cash flow projections" – prompting PAC chairman Datuk Seri Azmi Khalid to give her an impromptu tutorial.
With a BA from University Malaya and a Cranfield School of Management graduate and years of working in the finance divisions of various ministries, Phang should be more convincing if she wants to play dumb.
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