The High Court in Kuala Lumpur was told today that a bond for RM1.3 billion was issued for the Port Klang Free Zone (PKFZ) project.

Former Malaysian Information Merchant Banker (MIMB) Capital Market department head Ismadi Isenin (rpt:isenin)said the bond was issued by Special Port Vehicle Berhad (SPV) after it was appointed by MIMB on behalf of Kuala Dimensi Sdn Bhd (KDSB).

He said KDSB waived their rights to SPV to obtain a high loan because of its involvement in many business and huge debts.

MIMB was the ‘lead arranger’ in the bond issuance and was also responsible in preparing the documents for investors and the Securities Commission to obtain approval, he said during examination-in-chief by deputy public prosecutor Adilla Ahmad.

Ismadi, who is the 19th prosecution witness, was testifying in the trial of former transport minister Dr Ling Liong Sik, who is charged with cheating the Malaysian government.

Ling, 68, is charged with cheating the government by not disclosing to the cabinet an additional interest rate of 7.5 percent per annum on the purchase price of the land for the PKFZ project, which had been fixed at RM1,088,456,000 by the Valuation and Property Services Department (JPPH) based on RM25 per sq ft inclusive of the coupon/interest rate.  

He also faces two alternative charges, of cheating and intentionally omitting from the cabinet that the 7.5 percent per annum was an additional interest rate on the land price.

The offences were allegedly committed at the fourth floor of the Prime Minister’s Office, Perdana Putra building in Putrajaya, between Sept 25 and Nov 6, 2002.  

‘Profit of RM40 million made’

Ismadi said the total bond issued was RM1.35 billion and MIMB made a profit of RM40 million from it.

“The bond amount (for the PKFZ project) was RM1.31 billion. We sell to the investors for RM1.35 billion. The difference is the profit for MIMB,” he added.

When cross-examined by Ling’s counsel, Wong Kian Kheong, Ismadi agreed with Wong that KDSB had no rights on the bond, except through MIMB, and that the profit from the sale of the bond could not be used indiscriminately by MIMB or KDSB.

Earlier, former Malaysian Rating Corporation Berhad (MRCB) executive vice-president Mohd Izzudin Yusuf told the court that Ling had signed a recommendation letter for KDSB for the bond issuance on May 28, 2003.

Following which, MRCB gave its most maximum valuation because the recommendation from the ministry was one of the important conditions in the bond issuance, he added.

The hearing before Justice Datuk Ahmadi Asnawi continues on Monday.

- Bernama