The Penang Development Corporation (PDC) had to follow instructions from the majority shareholder when disposing of its 49 percent stake in Tropical Island Resort Sdn Bhd (TIRSB), said Penang Chief Minister Lim Guan Eng.

In a statement today, Lim said the majority shareholder would determine who could buy the shares and at what price.

This was in accordance with laws governing companies, said Lim.

Lim was responding to claims by Penang BN chief Teng Chang Yeow that PDC had rejected a better deal in 2013 that could have made the state-owned company more money.

PDC finalised its divestment in Tropical Island Resort Sdn Bhd in March this year. The majority shareholder is the UDA Holdings Berhad, a federal government-owned company.

Lim said PDC had rejected several proposals from UDA before finally agreeing to sell its shares at RM156 million, at a profit of RM140.6 million.

"We accepted after they agreed to first fully pay up a loan of RM4.4 million and that PDC's 49 percent stake in TIRSB will only be transferred upon full payment of RM156 million after eight years," said Lim.

Lim contradicts himself

In an immediate response, Teng said the Companies Act 1965 stipulated that a shareholding of more than five percent in a company constitutes a "substantial" shareholding.

"As PDC has 49 percent share in TIRSB, it is PDC is not a minority shareholder. PDC is a substantial shareholder in TIRSB.

"PDC has representations on the Board of Directors of TIRSB. As members on the Board of Directors, PDC has say in the company," said Teng in a statement today.

He said it was impossible for UDA to determine the price at which the selling price of PDC's stake.

"If PDC is a minority and has no say, how could it reject several proposals made by UDA in the past.

"Is this not lying (from Lim)?" he asked.

He added that there appear to be no publicly available documents with details on the divestment and questioned the state government's CAT (competency, accountability and transparency) slogan.

On legal threats by Lim, Teng said he would continue to make further exposés on land deals under Lim's administration.