PKFZ land sold for higher than valuation, court told

The cabinet paid RM25 for per square feet (psf) to acquire land for the Port Klang Free Zone (PKFZ) project in 1998 despite lower government evaluations, the Kuala Lumpur High Court was told today.

Teo Lee Lee (left) , a retired valuer from the Valuation and Property Services Department (JPPH) testified before judge Ahmadi Asnawi that the price paid for the land was higher than her estimation. Teo joined the JPPH in 1969 until retirement in 2004.

“I valued 400 acres of land at RM13.50 for per sq ft without the main access road and basic infrastructure.

“I gave a second value of RM17 per sq ft in the event the seller built the main access road and basic infrastructure,” said Teo in reference to Kuala Dimensi Sdn Bhd (KDSB), which sold the land.

Among the considerations Teo said she had taken into account the 400 acres on a 99-year leasehold of which four years had lapsed.

The 63-year-old retiree was testifying at the corruption trial involving former transport minister Dr Ling Liong Sik, which began today.

Deputy Public Prosecutors (DPP) Tun Abdul Majid Tun Hamzah and Manoj Kurup are appearing for the prosecution while Ling is represented by counsel Wong Kian Kheong.

Teo based her valuation on fact that the 400 acres was only part of 1,000 acres.

“I also took into account the selling prices and offer prices on Pulau Indah at that time was RM15 to RM20 psf for small plots of land since 1995.

“I aslo took into consideration that the market value in 1998 was affected by the Asian financial crisis and market prices were sluggish in the country and in the region,” she said when quizzed by Tun Abdul Majid.

Her initial valuation report was approved by the JPPH headquarters but she added that they later revised her valuation to RM18 psf in 2000.

Instructed to re-evaluate her valuation

According to Teo, she was instructed to re-evaluate her valuation after KDSB submitted a private valuation report which was prepared by Azmi & Co Sdn Bhd in November 1998.

She said that land owner KDSB had quoted RM29 which was more than the market value and she had prepared another report on April 3, 2000.

“This time I look at the value of a wider plot of land, 830 acres... and I found that their valuation was too high and I kept my initial valuation of RM13.50psf, (which is) just for the land and RM17psf for the land including main access road and basic infrastructure,” said Teo.

Asked why she had maintain her initial quotation, Teo said that she found no basis to the value of RM29psf.

She added that the condition the site was bare and had not changed since her first visit in 1998.

Teo said she suspected that the higher valuation was cited because the land owner had added “special value” to the agreement.

“Special value could mean that the buyer was in desperate need of the land and therefore offered a special value because no one else could offer such a plot.

“The second reason could be that the seller offered to construct extra infrastructures, for example, a flyover, TNB station, sewerage plant and etc,” said Teo.

Ling today claimed trial to amended principal and alternative cheating charges.

According to the main charge, he was accused of deceiving the Malaysian government between Sept 25 and Nov 6, 2002 by deceiving the cabinet into agreeing on the land purchase in Pulau Indah for the PKFZ project according to the terms agreed to between Kuala Dimensi Sdn Bhd and Port Klang Authority.

In the amended charges, the prosecution said that Ling purposely did not reveal facts regarding an interest of 7.5 percent per annum in addition to the cost of the land which was priced at RM25 per sq ft which summed up to RM1,088,456,000.

On the first count, Ling is alleged to have deceived the cabinet into agreeing to the terms of purchase between Kuala Dimensi Sdn Bhd (KDSB) and Port Klang Authority (PKA) and giving its approval for the purchase.

He was said to have committed the deception with the knowledge it could cause wrongful losses to the government and despite being bound by a fiduciary duty to protect the government.

The charge, under Section 418 of the Penal Code, carries a maximum sentence of seven years imprisonment or fine or both upon conviction.

Ling faces an alternative charge of similar cheating for deliberately concealing facts related to the project from the cabinet.

The charge, under Section 417 of the Penal Code, is punishable by imprisonment of up to five years or fine or both upon conviction.

It is expected to hear the testimony of 40 witnesses in total.

The trial resumes with Teo on the stand.