• The government should aggressively pursue companies which owe big debts to the government rather than just focusing on PTPTN defaulters

    Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 28th of October 2014

    The government should aggressively pursue companies which owe big debts to the government rather than just focusing on PTPTN defaulters

    In my budget speech yesterday, I highlighted a number of companies which repayment arrears on their federal government loans which run into millions and sometimes billions of ringgit. They include a number of private companies as well as some companies which are owned by the government via the Ministry of Finance Incorporated and Khazanah Nasional.

    The repayment arrears of these companies were listed out in Schedule 2.28 of the Financial Statement and Financial Management of the Ministries / Agencies of the Federal Government as part of the 2012 Auditor General Report.[1] For example, Perwaja Steel Sdn Bhd and Equal Concept Sdn Bhd, which holds an indirect stake in Perwaja Steel, were listed as having arrears of RM32.27 million and RM22.5 million in year ending 2012. The report also showed the amount of the outstanding loan which had to be serviced by these companies and the amount paid by these companies. For example, Perwaja Steel and Equal Concept’s loan repayments were listed as RM30.42m and RM21.57m respectively. Both companies failed to pay a single cent of their loan repayment in 2012.

    Not only that, Perwaja Steel and Equal Concept both had their arrears written off / restructured to the tune of RM58.06m and RM41.52m respectively. In other words, not only was Perwaja Steel and Equal Concept not punished for their failure to service their loans, they were ‘rewarded’ by the federal government by having part of their arrears written off / restructured.

    These were not the only two private companies to have repayment arrears with the federal government that were not properly serviced. According to Table 1 above, others include the National Feedlot Corporation (NFC) which failed to pay a single cent of its RM17.49m repayment in 2012, Lebuhraya Shapadu (which was in the process of being liquidated in 2011) which failed to fully pay the RM23.92m repayment in 2012, Premium Agro Products which failed to make any repayment on its RM8.29 repayment in 2012, Agro Qas which only paid RM0.97m of its RM3.69m repayment in 2012, White Heron Dairy Farm which failed to make any payment on its RM2.84 repayment in 2012, MY Ikan which failed to make any payment on its RM1.9 million repayment in 2012, A-Winn Global Market Service which failed to make any payment on its RM1.11 million repayment in 2012 and Airport Limo (M) which failed to make any payment on its RM2.2m repayment in 2012.

    And this does not even include the loans to private companies which the government has to write off such as the RM244 million outstanding loan of Invent QJaya, a company started and controlled by Dr Sadeg Fareq, which had to be liquidated in 2006 after accusations of illicit money transfers for the owner.[2]

    Nor does it include the RM4.6 billion soft loan which the government gave to the Port Klang Authority in order to ‘bail-out’ the Port Klang Free Zone (PKFZ) project.[3]

    The federal government has to be consistent in its approach towards pursuing loan defaulters. Right now, it seems that those who owe millions, hundreds of millions and even billions are let off but those who owe a few thousand are pursued relentlessly. PTPTN defaulters are threatened with a credit blacklist while the directors and owners of companies which owe millions to the government are free to continue to be directors, own and run other companies.

    To paraphrase John Paul Getty, “If you owe the government a few hundred Ringgit, that’s your problem, if you owe the government a few million Ringgit that’s the government’s problem.” That’s the current problem with our government’s attitude towards its loans and debts.

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

    [1] or “Penyata Kewangan dan Pengurusan Kewangan Kementerian / Jabatan Kerajaan Persekutuan

    [2] http://promahathir.blogspot.com/2006/12/court-orders-inventqjaya-to-be-wound.html

    [3] http://www.pkfz.com/content/news/pressclippings/local/2007/nov07/Nov%2030%20-%20TheEdgeDaily_BW.pdf

     

Leave a reply.