Two daunting tasks awaiting next PKA head

Rumour is rife that several MCA leaders are lobbying for the chairmanship of the Port Klang Authority (PKA) as the current chairperson Lee Hwa Beng’s tenure will end by March 31.

However, Lee (left) warned that whoever takes over the helm of PKA, which is the statutory governing body of the Port Klang Free Zone (PKFZ), will have to make two daunting choices resulting from the multi-billion ringgit scandal involving the two bodies.

The next chairperson would have to face legal responsibility should he or she fail to make the correct decision, stressed Lee.

The first decision will be whether to sue the former directors of PKA for failing to carry out their fiduciary duty, which was recommended by Skrine, the legal firm engaged by PKA.

“They (Skrine) have come back to us. There are 11 instances where the previous directors had failed in carrying out their fiduciary duty. Their opinion is that we should take action against them to recover the loss suffered by PKA,” said Lee in an interview.

MOT wants second legal opinion

However the representative from the Transport Ministry (MOT) who sits on the PKA board wanted to seek a second legal opinion. The ministry had engaged their own lawyer to look into all the relevant documents.

Pressure is mounting on PKA to sue its former directors after its former general manager OC Phang was charged with criminal breach of trust and making false claims, because Phang was responsible to the directors then.

“If I were re-appointed, I will definitely do it. If I were not re-appointed, I hope the new chairman will carry it out because we must not forget, PKA does not belong to me or anybody, it belongs to the federal government, by that it means belongs to the public, it is the public fund.

“Our lawyer is of the view that if the current board does not take action against the previous directors, we can be sued for failing to carry out our fiduciary duty also. It is because we have been advised to take action but we did not,” explained Lee.

He also cited the recent action by Sime Darby to sue its former CEO and directors over huge losses.

“I became more concerned because of the precedent set by Sime Darby to sue their former and current directors,” Lee added.

However, he said that the final decision will only be made by the new chairperson because MOT is expected to come back with its legal opinion after March 31.

PKA chairperson's post is traditionally reserved for MCA politicians. Lee's predecessors include former MCA secretary-general Ting Chew Peh, former MCA vice-president Yap Pian Hon and current MCA vice-president Chor Chee Heung.

Other than representatives from relevant ministries and unions, PKA former directors includes several political appointees (see table).

Pay or not pay?

The second challenge is the RM487 million payment to PKFZ turnkey contractor Kuala Dimensi Sdn Bhd (KDSB) due in the middle of the year.

“Opinion from Skrine is that after last year’s payments, the outstanding amount will come to less than RM1.6 billion, dropping below the disputed amount we asked from them. So Skrine recommended that we don’t pay.

“If the board makes a decision to pay, the board will be responsible for the loss if we are not able to recover from KDSB in case we win the civil cases,” warned Lee.

“This is very onerous on the board. As far as I’m concerned, I will never pay like I did last year. So if I were re-appointed, I will not pay again.”

However, he conceded that the transport minister has the right to overrule the board’s decision under the current law.

According to the agreements, PKA is scheduled to pay to KDSB the land and development costs of PKFZ from 2007 to 2017, which total RM4.632 billion.

Last year the same issue had ignited a heated debate as leaders from both the ruling and opposition coalitions called on PKA to withhold the payment as PKA had sued KDSB for allegedly overclaiming RM1.6 billion.

Although the board decided not to make the payment, it was overruled by Transport Minister Kong Cho Ha.

Public can sue the minister

Asked on whether the public can take the transport minister to court over his decision, Lee opined that a class action is possible.

“You are taxpayers and the taxpayers’ money was lost. In my opinion, you can sue because it is taxpayers’ money.”

The former MCA assemblyperson for Subang Jaya was appointed on April 1, 2008 as PKA chairperson by the then-transport minister and MCA president Ong Tee Keat, who later extended Lee’s term twice.

Under the leadership of  Lee and backed by Ong, PKA took several bold actions to probe the multi-billion scandal including commissioning an independent audit report and seeking professional advice from external bodies, followed by filing civil suits against several individuals and companies to claim the losses.

Those investigations also prompted the government to be more proactive in addressing the scandal. Subsequently former transport minister Ling Liong Sik, Phang and several others were charged in court and a high-powered task force was set up by the cabinet to carry out further investigation into the scandal.

Ong was later ousted by MCA deputy president Chua Soi Lek in the eight-month MCA power tussle which caused him to be removed from the cabinet and the ministry was taken over by newly elected MCA secretary-general Kong.

Hence Lee, a staunch supporter of Ong, is likely to be replaced by other MCA leaders from Chua’s camp.

Part 1: PKFZ may face 'bankruptcy' over soft loan

Part 3: PKA chief: No regrets opening can of worms

YourSay: Guess who's going to bail out PKA?