PKA chairman: I voted with my conscience

Written by Sharon Tan
Monday, 28 March 2011
The Edge Financial Daily

On March 22, at Lee’s last board meeting as PKA chairman, he was outvoted 5-2 when the board decided not to sue the members of the previous board for failing to execute their fiduciary duties in relation to the PKFZ fiasco.

Lee, whose political career includes three terms as the Subang Jaya assemblyman, says he knew the Transport Minister had not recommended his reappointment as PKA chairman. However, he remains hopeful as he believes his work is not yet complete.

As his tenure draws to an end on March 31, Lee feels that he has tried to correct the PKFZ debacle, which may cost taxpayers RM12.5 billion if it defaults on its borrowings. Under his watch, a forensic audit of the project was initiated, good practices put in place, including a whistleblower policy, and three independent directors appointed to the board of PKA, which had been filled by politicians and civil servants.

Here are excerpts of the interview:

TEFD: What was it like when you took up the job three years ago? You knew it was going to be a hot seat.

When I was offered the job by the then MCA president Tan Sri Ong Ka Ting, I was aware of the controversy. I ran through all the newspaper reports. I met Ka Ting and Transport Minister Datuk Seri Ong Tee Keat together. They agreed to the appointment of an international accounting firm to undertake due diligence and a forensic audit, upon which I agreed to take up the job.

Even when the construction was completed, there were accounts that were not closed. Out of the four agreements signed with Kuala Dimensi Sdn Bhd (KDSB) (the turnkey contractor), two (accounts) were already closed by the previous board.

When I took over, there were two more contracts not finalised. In a contract, you have to agree to the final figure or claim. Until today we have not finalised those two.

I am thankful to Tee Keat who suggested the PricewaterhouseCoopers (PwC) results be made public and he actually pushed me to be very transparent in my work. He gave me assurance that I have his backing.

He accepted my recommendation to appoint Skrine & Co, PwC and a quantity surveyor. All these helped my work a lot.

I can’t say that I went in with my eyes closed or was not aware. Of course, I didn’t know which direction it would go. But once he (Tee Keat) allowed me to have a forensic audit and the report to be made public, that relieved me of my concern of accountability to the public.

What was the most difficult period during your tenure?

We are taking action against people I know, people from my own party and senior government servants. It is definitely not an easy job and I know these people well.

Some of them gave pressure either directly or indirectly through mutual friends.

They gave pressure?

Yes, over the three years. Some called me directly, some indirectly through mutual friends. Many of my good friends kept asking me to quit for my sake.

But to me, this is a religious calling. I viewed it as a religious calling, so I have to carry out what I was called for.

I know very well that they don’t gain financially, and it was the culture then that you kept quiet and everything would be ok for you personally.

Some of these people were my very friends and colleagues in Barisan Nasional. They were the toughest decisions. But I have no choice.

Malaysia needs something. There are tens of thousands of posts like this from the state to central (governments) and even local authorities. If we can instil this fear in everyone that they can be sued for negligence of fiduciary duties, I think Malaysia can go forward.

You can’t expect the prime minister, chief ministers and ministers to oversee everything. These (board of directors) are the people who have been given the responsibilities and they must carry them out. If they dare not, then they must resign.

If they dare not squeal, they must resign quietly. They can do that. By their resignation and silence, the message is sent out.

My conscience is clear even if I have failed to take action against previous directors. I have tried my best. PKA does not belong to me. It belongs to the people. The people must judge me and my successors accordingly.

Is it true that the current Minister of Transport Datuk Seri Kong Cho Ha has never stepped into PKA since he was appointed last year?

Another regret is that the minister met me only once. It was two weeks after he was appointed. I went to see him at his office. Since then he has refused to communicate with me and come to any of our functions.

But to be fair, he also didn’t tell me what to do.

What else needs to be done for PKA and PKFZ?

Whether my tenure is extended or not, I still have to attend the criminal cases as a witness. The charge sheets have my name down as complainant. Those were from my reports to the police and the Malaysian Anti-Corruption Commission (MACC).

I don’t know what will happen to the civil suits. It is moving slowly in the courts. I don’t know if my successor or the new board will still pursue.

So there is the fear that they may not pursue the civil cases?

No, no. I cannot prejudge them. Whether they will pursue or not, I don’t know. But this is recovery of public money and we are talking about RM1.6 billion. That is a lot of money.

There is also the issue of the payment of RM550 million in June. If we pay, then what we owe KDSB will be less than RM1.6 billion. If we pay and later we win the case, can we recover the money?

Our lawyers recommended that we should not pay. If we lose the case, then we will pay the amount plus interest. If we win, we will deduct the amount owing to them.

The super task force headed by the chief secretary to the government has been quiet on the turnaround plan for PKFZ. What have you got to say? What can be done for PKFZ?

I am also the chairman of the PKFZ board. We have made a decision quite sometime ago that we go ahead and do the best for PKFZ.

Because of this decision, we are able to fill up nearly 50% of the 512 light industry units. We have filled up 28% of the 600 acres of open land.
Unfortunately, we have only managed to fill up 5% of the office building.

We are able to have cash surplus (for PKFZ) since 2009.

So there is nothing from the super task force?

I have not received any report from them.

Because we have decided to go ahead to do all we can for PKFZ, I have signed the first MoU with the Indian Maritime University to set up an Asian Maritime University in PKFZ. This is similar to the Asian Institute of Management in Manila and the Asian Institute of Technology in Bangkok.

This coming Monday (today), I am signing another MoU with China National Technical Import and Export Corporation, a Chinese government body. It will rent one block of our lease office building, about 400,000 sq ft, to exhibit their products for the Southeast Asian market.

I am very confident if given time, we can fill up the 1,000 acres of PKFZ. But of course as I have said previously, even if PKFZ is fully occupied, we can never repay the instalments to the Finance Ministry totally — RM7.2 billion plus interest.

Due to the mistakes of the previous board, the government has to make a decision to waive the loan. PKA cannot go bankrupt. The port operations are doing well. During my watch, Port Klang went from 16th place to 13th place in terms of the busiest ports in the world.

The government has to make a decision either to waive or reduce the debt so that it is affordable for PKA to pay. That is the turnaround solution.

They have to because it is due to the mistakes of the previous management.

PKA just had its 20-year Master Plan approved. By 2017, we need between 2.5km and 5.5km of additional wharf because of our growth. We have to start now to get funds to build the additional wharf.

The port is doing well. The government must not kill this goose that lays the golden eggs. Let us prosper. The port is important for the country. About 50% of our world trade goes through Port Klang and 70% of east Malaysia’s trade also passes through here.

Can you comment on the talk about industry players lobbying to sit on PKA’s board?

If they sit there, it will be (in) self-interest. Even though they say they represent organisations such as freight forwarders or shipping owners or depot owners, there will be conflict of interest with the company or association they work with.

We have the Port Klang Consultative Committee in which all of them are represented. We meet once every three months. The Port Act prescribes that certain important issues cannot be passed without approval of the consultative committee. One example is any increase in port tariff and reduction of freight storage space has to go through the consultative committee. There is a mechanism to seek consultation.

Your last words?

The (strategy of having) three independent directors that we have implemented is important. They have no interests. They are not politicians nor government servants. They act as a conscience for the board.

I can’t blame the five other directors for not taking action against the previous members. It is a very difficult decision. I don’t blame them. I understand why they voted like that. I am not angry with them but I am disappointed.

I voted with my conscience and I can sleep well at night. If they had allowed me to proceed with the legal actions, I think it would have made a difference to the country. So I failed.

  1. #1 by monsterball on Monday, 28 March 2011 - 8:18 pm

    There are two ways I am moderated.
    One with comment totally thrown out.
    THe other will comment I can read…”‘under moderation” and not approved.
    I wrote on PKFZ …message is tong sampah.

  2. #2 by monsterball on Monday, 28 March 2011 - 8:22 pm

    I mean..the other comment printed out with words…”under moderation”..where it is not approved…and only I can read it to talk to myself.
    I wrote on PKFZ …message is THROWN to tong sampah..totally rejected!!

  3. #3 by waterfrontcoolie on Monday, 28 March 2011 - 11:50 pm

    Port Klang may glorify to grow in the Port Popularity Parade but how meaningful it is to the local SMIs is another issue. A friend who is well versed in this sector thought otherwise. Of late, it is confirmed that PKA has “agreed” to increase the port charges again, second time since privatization or my friend’s preferred term Piratization! While we are at the tail-end of our ealier advantages gathered from the past; Thailand and Vietnam have certainly caught up with us. The experts said that with toll and our higher cost of living, Port Klang is uncompetitive in the last-mile gap. It is also noted by those involved that the last capital dredging at the North Channel costing some rm$200 million some 3 years ago had come to NOUGHT! so the Malaysian tax-payers are asked to pay $200 million for 3 years serving maybe 50 very large contianerships! This is the type of mathematical genuises we had with all the As that we produce every year at the public examination.
    I was also told that inspite of the high container throughputs at Port Klang, only 40% are actually local, rest are transshipment containers handled below operating cost! [ I was told this is better than PTP with less than 5% of local boxes!!] Hence the need to make local shippers to pay higher rates!!! Indeed we are carried away by 1st Class SLOGANEERING.
    Well, in spite of Billions being spent on transport infrastructure, my bet is Thailand will flatten us come 2014 when the China-built passenger railway comes into operations in 2014 right to our door-step at Bukit Kayu Hitam! Leaving the current track for freight trains which will prove more than competitive to our local operators who have to depend on trucks since KTM could npt even run a freight train daily.
    Maybe we can see if any more Southern Thailand containers still come to Penang or Port Klang or even ‘flow’ back by rail to some Burmese port called Tavoy!1

  4. #4 by limkamput on Tuesday, 29 March 2011 - 9:25 am

    In managing an organisation or any resource, the most important thing is to ensure that bad things and abuses are not allowed to happen. Once they have occurred, it is almost impossible to trace who did what and who was culpable. The thieves have booted, so to speak. Frankly, it is almost useless to talk about remedial or recovery measures.

    The fiasco in PKFZ can be attributed to many factors; corruption, incompetence, and people with no common sense helming the organisation. If we have all these elements present, it is useless to talk about the viability of the project. A 100% viable project would also end up useless.

  5. #5 by limkamput on Tuesday, 29 March 2011 - 9:29 am

    Lee talked about people with vested interest sitting in the board of PKA and therefore rendered the board ineffective. To me, this manifests his incompetence and shallowness in looking at issues. Which organisation does not have a board? Which board does not have members who represent some vested entity? The effectiveness of a board is how the board as a whole is able to circumscribe the interests of the individual members when making a decision. This, I think PKA has not been able to do because many of them there are simply too corrupted, incompetent, no business sense or a combination of those.

    One more thing: you Chinaman in MCA and Transport Ministry are simply useless. Gave you one project to manage, you fellows must scr*wed it up big time – this would have been the general impression most gathered. If UMNO has benefited big time, it is also due to the stupidity of MCA to allow themselves to be used and abused. So you think UMNO is going to protect you fellows? We shall watch and see; I remember a former President of MCA served jail sentences in both sides of the crossway in the 1980s. So LLS and CKC, get ready.

  6. #6 by sheriff singh on Tuesday, 29 March 2011 - 9:43 am

    Maybe someone should do a “Zubir”, the ex-CEO of Sime Darby.

    Sue all the Directors, past and present, make them all personally liable, for all of PKA’s losses.

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