In July, MB Khalid told the people that five local audit firms of international standing will be appointed by the Selangor state government to review the Talam’s RM676 million bail out.
After 2 months, the promise is not fulfilled.
The People only see the sole declaration from KPMG Transaction and Restructuring Sdn Bhd (“KPMG”) which is of the view that the Selangor state government made a sound commercial decision under the circumstances at that point in time. The other four auditors are apparently silent on whether the decision is sound at that point in time or at the point in time now.
In fact, the declaration of KPMG had raised more questions than answers to the questionable valuation of Talam bail out. What scope of work had been performed by the auditors? Is it a full scope audit or merely a review of the information given by the state government? Has the auditor “reviewed” the white paper which is delayed for 2 years? Why the review of the auditor can be completed if the state government said the white paper is still in the process?
The People on the street may not be able to tell the difference between full scope audit and review. But for all the professionals and accountants out there, they know a review can be merely based on the information provided by the state government, and there is no third party confirmation requested from the independent valuer as well as the state valuation department.
On Wednesay, Khalid announced that KPMG auditors found that the Selangor government made “a sound commercial decision” in its debt recovery exercise involving Talam.
However, KPMG’s advisory unit executive director Chan Siew Mei admitted that the scope of the review, which was conducted over a period of a month, was strictly to check transactions and supporting documents.
Referring to KPMG’s latest remark, the Selangor Barisan Nasional coordinator Datuk Seri Mohd Zin Mohamed revealed the truth to the People that the investigation by state appointed independent auditor only reviewed transactions and related documents but no comprehensive audit on the disclosures and questions raised by Selangor BN and MCA.
“More importantly, the auditors admitted this. As the opposition in Selangor, we are still not satisfied with the brief explanation by the menteri besar.”
“In fact, his threat of legal action if this matter continued to be pursued showed that the state government was still trying to hide certain things.”
“At the same time, if it is true that the auditors have done their job, why hasn’t the menteri besar produced the audit report? He must produce the white paper on Talam as promised,” Mohd Zin said at a press conference.
Mohd Zin questioned the state government’s acceptance of six lots totalling 535ha of land in Bukit Beruntung 2 for RM345 million from Talam, whereas the valuation of the land was RM113 million
He also question the purchase of 161ha of hill slope, Class 3 and Class 4 land, in Ulu Yam for RM18 million, even though the land was valued at RM12.7 million.
“Henceforth, we would like KPMG to explain to the Selangor people within seven days which aspects of the two above mentioned examples had been considered smart and prudent acquisitions made by the MB.”
Zin said it was puzzling that Khalid insisted that the deals involving Talam was not a bailout but a “debt rehabilitation” when it was revealed that the state government, through its subsidiaries, had spent a huge sum of money to buy Talam’s assets.
“What does debt rehabilitation mean? Isn’t the purchase of Talam’s assets not a bailout?”
He said in light of the latest development, the menteri besar should accept BN’s suggestion to have an independent committee conduct an investigation as there were still many unanswered questions.
He pointed out that in the frequently asked questions (FAQ) prepared by the state government, there was no mention of the “underwater” land bought from Talam in Bestari Jaya and Danau Putra, which was said to be over valued.
“In the latest disclosure by MCA, the state government has also allegedly bought land in Bukit Beruntung 2 and Ulu Yam for more than what they were valued. Can the auditor confirm that this transaction is clean and above board?
“Until a full report is out, we will continue making exposes so that the people will not be fooled by the menteri besar and state government’s ‘magic tricks’ through their explanation,” he said.
But Khalid said that at no time was the state “shortchanged” as provisions were put in place to ensure that Talam would make up the difference if the land did not match the value of the debt.
Chua Tee Yong said through Twitter: “Enron and a lot (other) cases show that (an) audit and its results are limited to the documents available”.
Enron was an American energy giant at the heart of a scandal that led to the dissolution of major audit firm Arthur Andersen for failing to uncover billions of debts and failed projects hidden by executives through accounting loopholes.
“That is why he has appointed four generals’ to help him fend off the issues,” said Chua Tee Yong.
“But people are curious why Khalid did not pick any of his executive councillors to defend him over the Talamgate controversy,” he added.
Chua was responding to the Selangor Government’s move to appoint Petaling Jaya Utara MP Tony Pua, Kuala Selangor MP Dzulkefly Ahmad, Selayang MP William Leong, and Khalid’s political secretary Faekah Husin as spokesmen on the debt recovery exercise.
The four had challenged Chua to a debate in Labis this weekend.
However, the Labis MP said he did not want to waste time debating with those not privy to details of the transactions.
“My invitation to debate with the mentri besar is still open. He is the best person to answer the questions raised,” he said.