Goodness gracious, more scams and evil schemes to plunder Malaysia by Najib and cohorts being exposed: Quote KUALA LUMPUR: As the government-owned strategic investment fund 1Malaysia Development Bhd (1MDB) goes under the microscope, DAP has highlighted another company that has accumulated huge debts in recent years. Serdang MP Dr Ong Kian Ming said a little known company owned by the Finance Ministry, Pembinaan PFI Sdn Bhd, recorded RM27.9 billion in debts at the end of 2012, but the amount could have reached RM47.4 billion at the end of 2014.
The spending of Pembinaan PFI did not appear anywhere in any of the federal government’s budget accounts, which meant all expenditure was for “off-budget” items, he said in a statement yesterday. The company’s debts were listed as part of the federal government’s contingent liabilities. “Without accountability on how Pembinaan PFI is spending its borrowings, transparency on how it is servicing its debts, and vigilance from Finance Minister and Prime Minister Datuk Seri Najib Razak, the company can easily turn into another 1MDB,” Ong said. Pembinaan PFI is 99.9% owned by Finance Ministry Inc. The Federal Land Commission (FLC) holds one share in Pembinaan PFI. According to the Auditor-General’s (AG) Report in 2013 (series 3), Pembinaan PFI had the third-highest liabilities among all government-owned entities at the end of 2012. Its total liabilities were RM27.9 billion, behind two well-known companies with huge assets, revenues and profits, namely Petroliam Nasional Bhd (Petronas) (RM152 billion) and Khazanah Nasional Bhd (RM69 billion).
“But unlike Petronas and Khazanah, Pembinaan PFI does not have any operational income as shown by the same Auditor-General’s Report,” Ong said. “Its RM1.94 million revenue in 2012 was derived from interest income. This means that Pembinaan PFI cannot service its liabilities without help from somewhere else, namely the federal government.” The DAP MP said although Pembinaan PFI is listed in the AG’s report as having the third-most assets among all government-owned companies, its assets consisting of land leased from FLC. This, Ong said, was part of a complicated deal, where Pembinaan PFI then subleased the land back to the FLC in exchange for rent totalling RM29 billion, which was to be paid over 25 years. “In other words, unlike Petronas and Khazanah, which actually have their own assets, Pembinaan PFI doesn’t really have any real assets of its own. Pembinaan PFI’s liabilities would almost certainly have gone up in 2013. Unfortunately, three months into 2015, Pembinaan PFI still has not filed its company accounts for 2013 at the time of writing.”
Ong also highlighted that Pembinaan PFI also took out a Bai Muajjal Islamic loan facility with the Employees Provident Fund (EPF) on Aug 22, 2014, with a maximum amount of RM19.5 billion. The terms of this facility were not disclosed in Pembinaan PFI’s submission to the Companies Commission of Malaysia, he said. “In the interest of transparency, Najib as finance minister must ensure transparency in the spending, borrowings and debt repayment involving Pembinaan PFI to avoid another 1MDB scandal.” — The Malaysian Insider This article first appeared in The Edge Financial Daily, on March 12, 2015.