Penang Chief Minister Lim Guan Eng said today another sour land deal, this time costing the state treasury RM500,000 in losses, has been discovered by his administration.

lim guan eng dap pc on land scam controversy 130808 02 The latest deal, involving the Penang Development Corporation and a company believed to be controlled by an influential politician from Barisan Nasional, is the third to be uncovered by Lim since taking over from Gerakan chief Dr Koh Tsu Koon in March.

Two previous land transactions undertaken during Koh's time in power had also gone awry, wiping off a total of RM124 million from the state coffers.

"We will carry out an in-depth internal inquiry to find out who were directly responsible for it and whether or not the silly mistake was done deliberately," Lim told reporters after launching the DAP by-election operation centre in Permatang Pauh.

According to Lim, who is also DAP secretary general, PDC had agreed to sell a piece of reclaimed industrial land valued at RM5 million some 10 years ago.

The company, which Lim did not name, paid PDC a 20 percent deposit worth RM1 million using money obtained from a bank mortgage on the land to be purchased. But the deal was later aborted as the purchaser did not have sufficient funds to conclude the transaction.

Proprietor gone missing

Even though the state body was entitled to forfeit the whole amount of RM1 million, Lim said Koh agreed to forfeit only half the deposit. The PDC then refunded RM500,000 to the company, thinking it would settle its bank loan.

lim guan eng dap pc on land scam controversy 130808 04 But the company winded up and its proprietor went missing, forcing the PDC to fork out RM500,000 of state money to top up the forfeited deposit so that the RM1 million bank loan could be settled and land possession regained.

Lim criticised Koh's government for not taking sterner action and charging the company and its owner. "We will also want to know the action taken on the company to recover the financial loss," he added.

The flawed land deals have rocked Penang, drawing fire from the islanders known for their thrifty traits and financial savvy.

Koh, who governed the northern state for 18 years, has shot back at Lim, accusing him of politicisng the transactions which he said had been properly accounted for.

The two men are due to take part in an open debate on Aug 20 and are widely expected to square off on the issue.