The RM676 million Selangor – Talam “bail out” plan was so perfectly covered under the mathematical logic and the secret of this deliberate plan destined to be buried underneath forever if no one stood out to unveil the mask of hypocrisy.
It had been indeed secretly concealed for 2 years until Chua Tee Yong uncovered the make-no-sense Valuation for the fully/partially submerged lands done by the so-called “independent” professional valuer appointed by Talam.
After the scandal was exposed, MB Khalid and his administration were using “hide and seek” attitude in replying the rationale of the deal while the economic advisor of Selangor, Anwar Ibrahim had seemingly disappeared in the air without any comments.
In the absence of Khalid and Anwar, Malaysia People were introduced to the 2-1 = 1 equation by Selangor government’s sole “representative”, Tony Pua. Tony was convicted of defamation recently for spreading wrong information in other case but he teasingly condemned Chua Tee Yong for irresponsible remarks in this case.
In Tony’s defense, he argued that Selangor government had successfully taken over RM689 milliion worth of assets and cash from Talam in exchange of Talam’s encumbrances/bank loans plus the transaction costs amounting to RM288 million. The difference between the assets value and the encumbrances was then offsetting against the debt of RM392 million owing to Selangor government by Talam. As a result, Selangor government was said to have a gain of RM9 million (RM689 mil – RM288 mil – RM392 mil).
The manipulation of mathematical logic is so “deceitful” and someone without the financial knowledge will definitely be misled into believing the illustration portrayed by Tony as below:
The illustration sounds logical, right? Undeniably, they are so perfect in painting this “logical” picture to the People with the distorted facts.
Now, let’s unveil the cover of this manipulated and “deceitful” logic one-by-one and see the Truth behind the sin of manipulation!
Firstly, the RM9 million gain insisted by Tony was mainly derived from the assets value of RM689 million. But the question is – Was the valuation reflecting the market value?
The facts disclosed by Chua showed otherwise.
The Danau Putra land which is 80% submerged in water with the price tag of RM87.7 million was overvalued by RM57 million based on the auction price. The RM181 million of the submerged Bestari land was RM42 million more than the valuer’s price.
Taking consideration of these overvaluation, Selangor government had in fact overpaid RM99 million which was translated into loss.
Secondly, Selangor government assumed Talam’s bank borrowings amounted to RM266 million. The bank borrowings carried the interests rate as high as 7.75% to 16% and this fact was totally and deliberately omitted from the 2-1 = 1 equation. Based on an average 12%, Talam had to pay RM32 million interests per annum and total RM64 million if Selangor government did not take over their bank borrowings 2 years ago. Furthermore, the bank borrowings had fixed and floating charge over other assets. All these facts had been concealed by the manipulated and misleading 2-1 = 1 equation.
Now, the bank borrowings of Talam had gone, bank interests of Talam had gone and all the fixed and floating charge over Talam’s other assets as conditions in bank borrowings had gone as well.
Where had they gone to? No one will have a better answer than Selangor government which is entrusted by the People to look after the interests of the public.
We shall now fully uncover the Truth behind the sin of manipulating the 2-1 = 1 equation.
The Truth is Selangor government have net losses and not gain as what they told the People after taking into consideration of the overvaluation and bank interests. This is illustrated as below:
The above illustration had only taken 2 years interests since Selangor government assumed the liability 2 years ago. For sure, the bank interests would be a nightmare to all Selangor People for many years to come over the tenure of the borrowings
The credibility of Selangor government is at risks now as they failed to keep its promise to table a White Paper on the matter 2 years ago and they also failed to respond truthfully to all the concerns over the valuation and rationale. Talam is the sole winner of this deal obviously but Selangor People ended up as the loser unfortunately.
There will be more to come for sure and we will reveal how this deal becomes the fortune for some parties in our next Perfect Bail Out Plan?? (3) – The Path To The Eternal Wealth.