A key player in the Port Klang Free Zone project has questioned the integrity of the audit report issued by international firm Pricewaterhouse Coopers (PwC) on the controversial project .

At a press conference in Petaling Jaya late this afternoon, Wijaya Baru Holdings Sdn Bhd (WBHSB) Deputy CEO Faizal Abdullah said the audit report had ‘mischievously' left out certain information and this omission was damaging to his company.

kuala dimensi kdsb pc on pkfz report 290509 faizal abdullah 01 WBHSB is the sole proprietor of Kuala Dimensi Sdn Bhd, the turnkey developer for PKFZ. PKFZ is managed by the Port Klang Authority (PKA) which is under the authority of the Transport Ministry.

Faizal ( left ) said that on page 25 of the audit report, PwC had wrote material that was ‘highly defamatory' to his company with regards to potential conflicts of interest arising from the sale of the land on which PKFZ now sits.

"The report failed to specify the process by which Kuala Dimensi bought the land from KPPLB, and (how it was sold) to PKA seven years after that.

"Without revealing the process, people will think that there was collusion," said Faizal.

Land deal aboveboard

He explained that in 1995, Kuala Dimensi bought the land from Korperasi Pembangunan Pulau Lumur Berhad (KPPLB) following a KPPLB annual general meeting attended by more than 600 members.

klang pkfz pricewaterhousecoopers pkfz the parties involved 280509 The PwC audit report had named Sementa assemblyperson Abdul Rahman Palil, who was a PKA board member between 1997 and 2003.

The report said that Abdul Rahman's previous position as KPPLB president could have given rise to a possible conflict of interest in the project.

Faizal said that Kuala Dimensi had intended to turn the land, which was swamp land at the material time, into a mixed-development area consisting of commercial, agricultural and residential projects.

Following this, PKA started negotiations with Kuala Dimensi to purchase the land for the development of the PKFZ project in late 1998. The deal was finally inked in 2002.

"Everything was done aboveboard," Faizal stressed, adding that in any event, PwC had gone beyond its scope in looking at the land deal.

'In bad faith ' claim

Faizal also took PwC for to task for using ambivalent words in its report which he said may tarnish Kuala Dimensi's image.

port klang free zone pkfz white elephant 280509 "Why use the words ‘the potential interest overcharge' or ‘may have wrongly compounded'. Can't they clearly state whether there is overcharging? Is it because they are not sure themselves?" he said.

Faizal said that Kuala Dimensi was currently compiling information in order to rebut the various allegations.

"This just demonstrates that a lot of things in the report are not the gospel truth," he said, adding that WBHSB had been advised that PwC did not act in good faith.

Asked if legal action was an option, Faizal replied: "Firmly, yes! It may be against both (PKA and PwC) or just one of them."

Faizal also said that PwC should have been a ‘gentleman' and not impose conditions which absolved PwC of legal liability.

Faizal also revealed that PKA has been on schedule with its payments to Kuala Dimensi amounting to RM360 million which Faizal said was between 20 to 30 percent of the total amount due.

Support letters or guarantee letters?

Faizal also confirmed that ‘letters of support' by past transport ministers Ling Liong Sik and Chan Kong Choy to back Kuala Dimensi's issuance of RM4 million worth of bonds were not guarantee letters.

"As a contractor and as a layman, it is more of a letter of comfort and support," he said.

The letters were part of the three-inch thick appendix to the audit report, available for viewing at the PKA headquarters in Port Klang until June 10.

When pointed out that the documents appeared like guarantee of returns letters, Faizal said the onus was on the investor to check the contents of these letters of support.

ong tee keat pkfz klang visit 060508 12 He said the letters of support were necessary in order for a rating agency to grant ratings.

Faizal lamented the fact that while the PKFZ project was viable, it has been plagued with bad publicity and this caused clients to turn away.

He revealed that WBHSB shares were also affected and were now at a RM0.30 low from a RM2 high five years ago.