Investigation In Failure To Launch Penang Int’l Tuna Portff

Source: The Malaysian Insiders

The DAP, said this week Tan Sri Muhyiddin Yassin, must explain his role in the default by a government tuna port venture of a RM240 million bond which was issued based on an endorsement letter from the Agriculture Ministry he was in charge of in 2006.

The RM240 million government letter of support-backed bond issued by Malaysian International Tuna Port Sdn Bhd (MITP), which defaulted late last year, is now the subject of legal action.

MITP, 40 per cent owned by the Fisheries Development Authority of Malaysia (LKIM), defaulted on payment to bondholders last November.

DAP national publicity secretary Tony Pua called it another classic case of the standard practice of the Barisan Nasional (BN) government, where support letters were given to companies with “zero financial history”.

“MITP is a brand new company, backed by unknown investors. It is a company with literally zero financial history. It is a case where contracts were issued solely on the basis of a support letter, just like the letters of support in the PKFZ scandal involving Tan Sri Chan Kong Choy.

“Now that the bonds have defaulted, there are going to be multiple lawsuits. The question now is, is the government going to pay the bondholders?” asked Pua.

He claimed that it was the deputy prime minister’s responsibility to provide answers as Muhyiddin was the minister who had issued the support letter at that particular time.

“The deputy prime minister must answer this. Did you approve this fishy deal? Why was the contract given only on the basis of a support letter? The project could not have gotten through without the approval of the minister in charge,” claimed Pua.

MITP, a joint venture company between Blindforce Sdn Bhd (60 per cent) and LKIM (40 per cent), was incorporated in 2004 to undertake privatisation of the tuna port in Batu Maung, Penang.

The port was to be developed into a fully integrated fisheries port specialising in tuna by 2008.

MITP’s Bai’ Bithaman Islamic Securities (BAIS) facility of up to RM240 million for a tenure of 10 years was assigned a long-term debt rating of A+ID by the Malaysian Rating Corporation Bhd (MARC) based purely on a letter of support issued by the Agriculture and Agro-based Industry Ministry.

This became the focal point of Pua’s arguments.

It is understood that while the issue amounted to RM240 million, the bond was issued in tranches and only RM85 million was drawn down.