More than meets the eye in Kedah PNG project

(Bernama) – Kedah Mentri Besar Datuk Seri Azizan Abdul Razak broke his silence Tuesday over allegations of losses incurred by a state-owned company in a project in Papua New Guinea, and seemed to have opened a Pandora’s box.

He said a senior officer of the state-owned Kedah Corporation Bhd, who had since gone missing, had secured a USD40mil (RM122.1mil) offshore loan from a bank in the United Kingdom in 2009 without the knowledge of the board of directors and had worked with another company to invest in a plantation and logging project in Papua New Guinea (PNG).

“After learning of the irregularity, a committee was set up to investigate Kedah Corp’s operations and it was learnt that the PNG project was unprofitable and was terminated,” he told reporters when approached at the handing over of Aidiladha sacrificial cattle to Federal and state departments and agencies at the Suka Menanti Stadium, here.

Azizan said the state government ordered the termination of the transaction by the UK bank but was forced to settle RM1.4mil in consultancy fee to a company.

He also said that the state government would not hesitate to reclaim RM1.3mil from the company with which the missing officer had dealt with as the owner had promised to return the money.

“I am prepared to hand over the file on the case to the police, and to have the officer who has gone missing traced,” he said.

He denied that the Kedah government was involved in irregularities in the PNG project and invited immediate investigation by the police and the Malaysian Anti-Corruption Commission (MACC) into the case highlighted by the Auditor-General’s Report 2011.

The report had stated that Kedah Corp had obtained a RM135mil offshore loan to finance the project.

Azizan dismissed allegations that the state government was at fault for having caused Kedah Corp to suffer a loss of RM13.49mil in the project. Azizan claimed that many more cases of GLC mismanagement had driven the government helmed by him to incur debts, which had to be settled.

“I am forced to examine all the agreements reached to ensure that the state government does not incur losses, including the 99East project, a development on Bukit Malut in Langkawi involving 145.6 hectares of state land,” he said.