Former Transport Minister Chan Kong Choy made headlines after he was implicated by the Public Accounts Committee (PAC) over the Port Klang Free Zone scandal.

chan kong choy pkfz 041109 After a three-month probe into the matter, PAC released its much anticipated report yesterday recommending the police and the Malaysian Anti-Corruption Commission (MACC) to take action against Chan.

The report states that Chan possibly committed criminal breach of trust for the wrongful issuance of three letters of support without the approval of the Finance Ministry.

While all eyes are now on whether Chan would be brought to book, among the first to express doubt is none other than a PAC member who helped draft the report.

MACC had cleared him

dap 2010 budget rocket cafe 071009 tony pua 01 In a blog entry just hours after the report was released, Petaling Jaya MP Tony Pua ( right ) questioned whether the authorities would take any action, based on what the what MACC prosecution department director Mohd Shukri Abdull told the inquiry.

During the inquiry, Mohd Shukri confirmed that MACC had probed the letters and its findings were forwarded to the Attorney-General’s Chambers, who replied that there was no abuse of power.

"So, are they (MACC) now going to say that the letters were abuses of power by the former transport minister?

"Even the attorney-general admitted to the PAC that the letters are implicit guarantees, but obviously MACC had better calibre investigators and prosecutors," Pua wrote sarcastically.

"Which brings to question, maybe it is the MACC which should be investigated on why they are so completely useless with something as straightforward as this," he added.

Chan's three letters were crucial in allowing PKFZ turnkey contractor Kuala Dimensi Sdn Bhd in securing the 'AAA' rating to raise RM3.7 billion in commercial bonds and asset-fixed securities.

The letters written in 2003, 2005 and 2006 stated that the government "shall at all times in the future ensure" that PKFZ's owner, the Port Klang Authority (PKA), will meet their repayment obligations.

musa gani aca 110708 arrival Attorney-General Abu Gani Patail, when testifying at the PAC inquiry on Aug 12, said the letters were subject to interpretation in court, but he was of the opinion that the letters were implicit guarantees.

PAC's contention Section 14 (1) of the Financial Procedure Act 1957 does not allow the federal government to undertake any guarantee of financial liability without the authority of the Treasury.

Because of this, PAC recommended that Chan be investigated under this law, read with Section 409B of the Penal Code for criminal breach of trust.

Chan cites Queen's Counsel

Previously, Chan had maintained his innocence and claimed that the letters were not government guarantee but 'letters of support'.

Chan claimed that he had sought the advice of an unnamed Queen's Counsel, who later concurred with him.

He added that the three letters to the Malaysian Rating Corporation Bhd was not enforceable because it was not a creditor to the PKA.

NONE At the time, Chan did not confirm if the letters were written by Kuala Dimensi but instead said that they were prepared by one of his senior private secretaries by the name of 'Mr Leong'.

In 2007, PKA was unable to meet its financial obligations for the commercial bonds and securities, prompting the government to approve a RM4.6 billion soft-loan which sparked public outcry over PKFZ.

All three of Chan's letters and the soft-loan were disbursed during the tenure of Abdullah Ahmad Badawi as prime minister.

However, Abdullah has not been subject to any probe regarding the PKFZ scandal.

Despite the can of worms having been opened on this major scandal, the question on the minds of many is whether the government will swing into action, or pull another VK Lingam.

I shall return to defend myself, says Chan