Tan Sri Nor Mohamed Yakcop changed his testimony today, reversing his assertion made a day earlier that Tun Dr Ling Liong Sik’s support letter in the Port Klang Free Zone (PKFZ) project amounted to a government guarantee.
The former second finance minister testified yesterday that only the Finance Ministry could issue a letter of support with the Cabinet’s approval, and that every time such a letter was issued, the government would have to bear the responsibility if anything went wrong.
Nor Yakcop also said that Dr Ling’s letter of support was actually a “guarantee letter” as it helped secure a top-tier rating for bonds raised for the construction of the scandal-hit Port Klang Free Zone (PKFZ) and was sold for a profit of RM40 million.
But the minister in the Prime Minister’s Department also stressed that the support letter from the transport minister had not received the approval of the Finance Ministry or the Cabinet.
“I got the impression that his (Nor Yakcop) evidence yesterday showed that the support letter is a guarantee letter,” said defence lawyer Wong Kian Kheong.
Wong proceeded to read out excerpts from the testimony given by Attorney-General Tan Sri Abdul Gani Patail in 2009 during a Public Accounts Committee (PAC) inquiry into the PKFZ project.
According to the lawyer, the A-G had said that Dr Ling’s support letter was “not a government guarantee” as it did not give any assurance as to whether the government would ensure PKA would make any repayment on the project loan.
“I have shown the A-G’s opinion. You still hold to your view that P148 (Dr Ling’s support letter) is a guarantee letter?” asked Wong to which Nor Yakcop hesitantly answered “no”.
But the minister sought to explain himself later during the prosecution’s re-examination, saying that the reason why he viewed the support letter as a government guarantee was due to Malaysian Rating Corporation (MARC)’s triple A rating for the bonds issued after the support letters had been given by the Transport Ministry.
“Because we saw MARC had given the triple A rating for the bonds ... MARC saw the letters as a guarantee. When we looked at the support letters, generally we considered it as a letter of guarantee.”
Nor Yakcop also said that although the government listened to and often followed the A-G’s views, it was not “bound” to always abide by them.
Critics allege that the letter of support penned by the then-transport minister on May 28, 2003 — which coincided with his last day in office — and three others by his successor, Tan Sri Chan Kong Choy, were seen by the market as government guarantees to fulfil PKA’s obligations to landowner Kuala Dimensi Sdn Bhd (KDSB).
Dr Ling was charged in July last year with knowingly deceiving the Cabinet into approving the land purchase for the PKFZ, which resulted in wrongful losses for the government.
The prosecution has argued that the additional interest of 7.5 per cent per annum, amounting to some RM720 million, had pushed Port Klang Authority’s (PKA) land purchase from RM1.09 billion to RM1.88 billion for the port project.
The former MCA president also faces two alternative charges of deceiving the Cabinet into believing that the purchase at RM25 psf and the 7.5 per cent interest rate were acknowledged and agreed to by the government’s Valuation and Property Services Department (JPPH) despite knowing that there was no such agreement.
Dr Ling faces up to seven years’ jail and a fine if convicted of the principal charge under Section 418 of the Penal Code.
The trial resumes tomorrow morning.
If the letter issued by the transport ministry was not a government guarantee and the government therefore had no obligations towards the bondholders of Kuala Dimensi, why should the government step into the shoes of a guarantor and pay off the bondholders on behalf of Kuala Dimensi?
It would seem that the former finance minister's testimony in court is contradictory to and inconsistent with the government position and action on the issue.
Nor Yacob was a cabinet member at that time . The question to him is Did you or did you not know about this letter by Ling Lion Sik ?....I do not think LLS cleared it with him, the MOF or the Cabinet before issuing the letter, what happened after that is irrelevant..the harm had been done !! The blame falls on LLS' ..he must answer for his irresponsible act which is loaded with imputation of a corrupt practice....The entire government must accept the blame under the convention of collective resposibility and 1 Malaysia ....given the immense financial damage it all caused..But this is Malaysia we beleiveve in sandiwaras !
MACC is making the mockery of the rakyat IQ......n I can safely say a lot of ppl hv lost confidence in them.....