translation A Selangor state government-linked company which allegedly ' cheated ' the federal government of RM159.8 million over the delay in completing the controversial Matrade building has declined to respond to the accusation.

Met by reporters after its 4th annual general meeting in Shah Alam yesterday, Kumpulan Hartanah Selangor Berhad (KHSB) executive chairperson Abd Karim Munisar was tightlipped despite being repeatedly questioned on the matter.

"I cannot respond because the Securities Commission is probing the matter," said Abd Karim at a press conference held after the company's AGM.

He also refused to comment on whether KHSB - the mother company of Perangsang International Sdn Bhd (PISB) which was given the Matrade contract by the federal government - will be responsible for amount owed by its subsidiary.

KHSB is a public-listed company owned by another Selangor state government-linked company, Kumpulan Darul Ehsan Berhad, which is chaired by Selangor Menteri Besar Dr Mohd Khir Toyo.

KHSB is the subject of a complaint lodged by Selangor state assemblyperson Teng Chang Kim to the Securities Commission on Tuesday for seeking to avoid paying the multi-million ringgit compensation by selling its subsidiary for RM2 to a shell company.

Its new owners wound up its acquisition a year later, leaving the federal government empty-handed.

Shoddy construction

The Matrade contract was originally granted to PISB, a property developer and owned by KHSB, and work began in 1994.

It was due for completion in 1997, but this was delay to April this year. The nine-year hold up was due to shoddy construction by PISB, making the building completely unsafe for occupation.

PISB's contract was eventually terminated last March and a new contractor called in to make costly repairs, resulting in the RM167 million project to balloon to RM287.5 million.

PISB was later ordered by the federal government to pay RM159.8 million in compensation.

According to Teng, KHSB had stripped PISB of all assets and sold it for RM2 to a shell company, Tajuk Modal Sdn Bhd.

The new owners soon changed PISB's name to Tajuk Construction Sdn Bhd.

Tajuk Construction was wound up in January this year, one month before Works Minister S Samy Vellu revealed the extend of the delay to the Matrade building had cost the federal government.

Elaborate maneuvers

Teng alleged that the elaborate maneuvers involving the former PISB and its subsequent winding-up was premeditated by KHSB, who knew early on that it would be asked to compensate the federal government.

The move, the politician-lawyer added, resulted in not a single sen being paid to the federal government to date.

Moreover, the federal government will not be able to recover the money from PISB directors as they had not signed a personal guarantee with the company.

Teng said that based on a copy of the Company Commission's report that he had obtained, Tajuk Modal was set up in March 23, 2003, four months before it bought PISB.

The report also stated the last time Tajuk Modal submitted company reports to the commission was in June 26, 2004 and there was no updates on the company for the following two years.

The report showed the company was owned by two individuals - Yap Fook Sang and Chong San - who were also the same people behind Tajuk Construction, the new name of PSIB.

Teng had urged the Selangor Menteri Besar to provide an explanation but Khir has remained mum on the issue.

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