By Parliamentary Opposition Leader, DAP Secretary-General and MP for Tanjung. Lim Kit Siang, in Petaling Jaya on Monday, 7.9.1987:
Call on UDA to explain whether it is enforcing its claims against Fleet Group, another UMNO investment company, for $300 million compensation for failure to complete the sale of perembe
In October 1985, Fleet Group – the first UMNO investment company – entered into a contract with UDA to acquire Peremba for $163.9 million.
Fleet Group paid $16.39 million as 10 % downpayment, with 90% of the purchase price payable 12-15 months after the contract date.
Peremba was the wholly-owned subsidiary of UDA, created in 1979 as its property arm, in which was concentrated UDA’s most valuable property developments and it shareholdings in other major property companies.
Peremba has been compared with the largest property companies listed on the Kuala Lumpur Stock Exchange, as it has many property projects in the ‘Golden Triangle’ in Kuala Lumpur, which were previously undertaken by UDA itself.
Early this year, Fleet Group defaulted on the Peremba deal, as it is in deep financial trouble, and was unable to find the money to complete the Peremba purchase.
Under the terms of the sale-and purchase agreement, Fleet Group should forfeit its downpayment of $16.39 million for failure to complete
the agreement. Furthermore, under the agreement, Fleet Group had also agreed to reimburse UDA for any dimunition in the value of Peremba during its stewardship if Fleet is unable to complete the deal. It has been estimated that during the period Peremba was under Fleet’s stewardship, it suffered a dimunition of value amounting to some $300 million.
UDA must now answer two question:
Firstly, is the $16.39 million deposit paid by Fleet Group being forfeited by UDA, for failure to complete the Peremba sale agreement?
Secondly, is UDA enforcing its claim against Fleet Group, for $300 million compensation, for the dimunition in value of Peremba as it had failed to complete the deal.
Although Fleet Group is the first UMNO Investment holding company, it must not be given any special whereby it need not honour its solemn contracts with the Government or statutory bodies. Otherwise, there would be a gross breach of power and conflict of interest, for there is the same set of persons presiding over the affairs of Government and Fleet Group.
There have been disturbing reports about the operations and transactions of the Fleet Group which raise serious ethical and conflict-of-interest questions, and the DAP call on the Government to answer these queries publicly and satisfactorily.
In this connection, the Malaysian public a right to know how many UMNO Investment Holding Companies had been established, and what sector of the national economy and corporate world has come under their control. It was only recently that the second UMNO Investment Holding Company, Hatibudi Sdn.Bhd., came to public knowledge, because of the UEM deal on the North-South Highway privatization. What are the other UMNO investment Holding companies which had been formed but which had not ben exposed to the glare of public scrutiny?