KUALA LUMPUR (July 1, 2010): Former transport minister Datuk Seri Ong Tee Keat (pix) today reiterated his stand that the Port Klang Authority (PKA) should not pay the Port Klang Free Zone(PKFZ) bondholders.
He said he was taken aback when the Inland Revenue Board (IRB) had asked PKA to pay the RM328.4 million in backdated taxes from Kuala Dimensi Sdn Bhd (KDSB).
He said there was no reason why PKA should be directed to do so because IRB can directly deal with the "defaulter of the taxes".
"This is something unprecedented. It is entirely at the discretion of the IRB to take action against any defaulter. PKA only deals with the Special Purpose Vehicles (SPVs) set up by KDSB. They don’t have any direct dealing with the bondholders," Ong told reporters in Parliament.
Yesterday, Ong wrote in his blog (www.ongteekeat.net) that KDSB had issued the bonds in the form of four sets of private debt securities and not PKA or the government.
"These private bonds were secured against repayments from the various principal agreements between KDSB and PKA. The bondholders are not privy to these agreements," he wrote.
He said the responsibility of paying the bondholders was with KDSB.
"The responsibility to pay the bondholders lays with KDSB and if default on payment occurs, the proper remedy should be obtained against KDSB," said Ong.
Last Wednesday, the IRB directed PKA to stop payment to KDSB and insist that it pay the amount to IRB.
On Tuesday, Deputy Transport Minister Datuk Abdul Rahim Bakri gave an assurance that the government will pay what is due to the PKFZ bondholders, saying the government has a commitment to fulfil.
Ong also said the letters of support issued by the ministry in the early 2000s were not government guarantees.
"The four letters of support are not guarantees per se. We must bear in mind that the Hansard reported a deputy minister of finance stating in Parliament that they are not guarantees.
"Further, there is a question of whether Section 14 of the Financial Procedures Act 1957 has been complied with. The obligation under the said support letters are simply to ensure that PKA will have funds to meet its obligations but does not constitute an undertaking by the government to pay PKA’s debts to a third party," said Ong.
He also said payment should be withheld because PKA and KDSB are involved in several law suits and making payments could jeopardise PKA’s cases.
Ong, who is Pandan MP, said as an elected representative, it was vital to voice the matter and that decision-makers should exercise their obligations entrusted to them with great care. -- theSun
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