Dear Uncle LKS

I was an ex-auditor from Ernst & Young and I am very upset how could such a fiasco of this size can ever, ever happen.

I had read through the entire PWC “report” which Ong Tee Keat says would bare all those details.

There seem to be a clear mistaken identity over the terms, “report” and “review”. By the terms of the scope sheet, PWC actually was only asked to review within those guided terms and not otherwise. PWC would not want to expand beyond what its duties are; lest they be classified as “busybody”, “unprofessional”, “stepping out of line”, “unethical” and whatnot you name it. It has thus, much needed, for PWC to maintain its integrity and professionalism in the course of this task. Of course, PWC would definitely not want itself to be sued for any unforeseen circumstances and coming from point of view involving their scope of work, namely ONLY a “review”, it is expected of them being very careful in their report. They cannot go beyond any investigation nor report it as an investigation. So, their report has to be qualified in their foreword that the report cannot be used for this purpose or that purpose. It appears to tell the recipients (including members of the public) that there is this something which they could not reveal; something not in the scope of engagement.

Let me give some insights to the implications which MACC, PKA, the Government, The Transport Minister and most importantly the public by large must take note of.

Firstly, as the scandal involves a non-matching income and expenditure event, how could PKA be able to meet its financial obligations with the interest spiraling against the low incomes it currently derives. It has been said by many experts that PKA should increase its incomes via new clienteles (renting out more of those units) but let us not forget about the fact that defects affecting units have more potential liabilities which quantum is not identified as yet and which cannot be relied upon on KDSB for rectification due to the fact that the defect liability warranty period had expired. I anticipate it will take PKA a Herculean task to resolve all these problems to turn around this fiasco; otherwise there goes another debacle involving public funds which Malaysians dearly must preserve in the light of the ongoing economic plight.

Let me dissect into the many intriguing events that took place; whether with the knowledge of the PKA board or not. There seems to be too much authority given to the General Manager (GM), Assistant General Manager (AGM) and Manager (General Services). Many of us would have some mind-bogging requirement to rationalize as most of the actions taken within the PKA management that were either blatantly exceeded or ignored. This is in reference and against which the followings (being in place) for a multi-billion Ringgit project to be carried out:-
a) Ministry Of Transport recommended KDSB be awarded contracts wherein there is no mention of any open tender exercise,
b) it was reported that all agreements were not submitted to the PKA board for approval,
c) the GM and a steering committee runs the project without specific authority nor subjected to the supervision of the PKA board (although the PKA board is updated periodically),
d) the steering committee was setup without PKA board resolution,
e) the GM has only RM50,000 specific authority limit,
f) common seal being used without the PKA board approval,
g) non-compliance with the Cabinet terms
h) acceptance of variation orders ADW & NADW beyond stipulated authority in place,
i) reliance on solely one solicitor and one quantity surveyor resulting in acceptance without KDSB completing the infrastructural works, acceptance of variation orders per (h) above,
j) despite knowing its inability to meet the Cabinet’s self-financing condition in May 2004, PKA still went ahead into signing other significant development agreements,
k) PKA and the Ministry Of Transport went against the Ministry Of Finance terms of land acquisition, its land acquisition financing or land lease option per the MOF letter dated 12/6/01; resulting in PKA needing a “bailout” in 2012,
l) PKA and the Ministry Of Transport did not develop PKFTZ in accordance to the JAFZ/TSG Masterplan which is over 8 years but instead opted for its development to be fully developed within 2 years; thus jamming up its cashflow now experienced by PKA,
m) no control over the RM51 million- RM309 million of interest charged to PKA as there seemed to be ambiguity over its calculation (not surprising for this to happen since all agreements were not approved by the PKA board and only one non-independent solicitor being used),
n) rationalization of buying the land at RM25/sq ft which is higher than anticipated should have raised concerns by the PKA board,
o) PKA did not require KDSB to submit plans and drawings, did not require DA3 to specify details of building and infrastructural specifications, scope of KDSB’s work and price specification,
p) PKA’s acceptance of KDSB’s architects’ certificate of payment,
q) PKA’s acceptance of higher interest on two occassions,
r) KDSB’s continued rectification of defects although contractually it is not obligated to do so.

Looking at all the above (a) to (r), there cannot be so much flaws that can slip the PKA board notice. It cannot be the GM and his team of steering committee having overlooked such glaring flaws. It cannot be, as solicitor, not noticing such discrepancies that were allowed to happen. Likewise, it cannot be the quantity surveyor cannot ascertain work completed or not before payment is made. It has to do with many implications many of us ordinary Malaysian can feel frustrated over such public misuse of funds.

Uncle LKS, push for a RCI in parliament in the next sitting. The BN government will be tainted if it does not act accordingly. Pursue it vigorously with Ong Tee Keat as Najib had mandated him to reply publicly. For this, may you forward this to Ong Tee Keat in order for him to lodge a MACC report himself and to accede to a RCI. Forward this to the King and all sultans in the form of a memorandum; highlighting to Their Majesties how much the rakyat is going to suffer in the years to come.

Gather your IT men to start off a website to collate all questions from the public and document each and every detail of the various dirty actions taken in this course of non-compliance to or exceeding authority which can be subjected to the existing laws. Press on for the AG to take action for such public debacle.

The rakyat is looking toward all clear conscience MPs to save Malaysians and Malaysia. We have suffered too much under 51 years of misguided rule and misappropriation of public funds.

In summary, all Malaysians should ask the followings:-

a) who authorized the signing of agreements, if not the PKA Board?,
b) who actually signed the agreements and acceptance of variations?,
c) who are those in the chain of command in the organization of PKA?,
d) were those in command aware of these flaws or were they in any way involved in one way or another in assisting, allowing it to happen or unaware of it?,
e) who are the cheque signatories who signed the cheques?,
f) were there verifications on a segregation of duties being carried out or were these transactions managed within a small circle of personnel in PKA and who were they?.

In any organization, there must be system control and especially important functions must involve check and balance. Segregation of duties would minimize subversion of system control. Questions like, ” Can payments be made without proper verification and authorization?”, “Can this happen without blah, blah, blah?”, etc.
If such control questions are put in place, there will be less chances of circumventing the controls.

I was also surprised by the fact that PKA had entered into a RM4.632 billion soft loan from the Govt on 30 June 2007 when it realized its first scheduled payment failed and I am certainly more taken aback that the Govt approved it when the Govt knew PKA did not comply with the Cabinet’s directive. It is a bailout as far as the public is concern. Why should the Govt then approve the soft loan? Don’t you think so, Malaysians? Do you think you have been taken for a ride or given “sodomie” to swallow?

Think for yourself how much your cucu & cicit would suffer. You decide what you need to do.

Dear LKS

Again, I would like to dissect a little more detail into the micro-level of ONg Tee Keat’s below statement:-

“……neither can the PKA board give it authority to check on matters outside the board’s own scope of authority.”

The question here I would like to pose to Ong Tee Keat is, “If PKA does not have the authority to authorize PWC to check on matters outside the board’s own scope of authority”, then who has? There must be a chain of command that the PKA board reports to. It must then be that higher up chain be responsible to dictate the PKA board to do so. Look at the setup of PKA and it would reveal that chain of command. is it the Minister Of Transport or the Ministry Of Transport? Lee Hwa Beng must stand out to clarify this aspect of authority reporting. It cannot be Lee Hwa Beng being a qualified accountant himself not knowing who he should be reporting. Then why is he being directed by Ong Tee Keat (as Transport Minister) to lodge a report at MACC if Ong Tee Keat is not the higher up command of the PKA board?

Many more questions still went unanswered. Why must the PWC report be vetted by the Cabinet first? Is there any cover up in tandem with the soft loan approved by the Cabinet?

Your answer is as good as mine.