DAP lashes out over Kuala Dimensi ‘bailout’

By Asrul Hadi Abdullah Sani, The Malaysian Insider

The DAP is questioning the government’s move to guarantee RM3.4 billion in bonds issued by contractors Kuala Dimensi Sdn Bhd (KDSB) to fund the debt-ridden Port Klang Free Zone (PKFZ) project.

Its Petaling Jaya Utara MP Tony Pua argued today that the government’s guarantee is “tantamount to an official bailout” of KDSB.

“The rakyat will want to ask why is the government giving an iron-clad assurance to settle KDSB’s debt obligations, even if KDSB is subsequently proven to have failed to perform a satisfactory job on PKFZ and should not be paid in full?

“This only goes to show that at best the government is completely clueless about its actions, or worse, it is sanctioning a bailout of KDSB which is owned by the Barisan Nasional Backbencher Club‘s chairman Datuk Seri Tiong King Sing,” he told reporters in Parliament today.

Deputy Finance Minister Awang Adek Hussin said yesterday the government would guarantee the bonds issued to allay investor concerns over the debt.

A fund manager who holds the debt, issued in 2003-2006 to fund the PKFZ project, had told Reuters that bondholders were concerned that letters of support honouring the bonds were not sufficient.

So they want the government to refinance the debt to overcome investor fears that they will not be repaid, said the fund manager.

Prime Minister Datuk Seri Najib Razak had told an investor briefing in New York yesterday that the government would honour all PKFZ obligations, said the fund manager, who attended the meeting.

The comment was confirmed by the Finance Ministry yesterday.