KUALA LUMPUR, March 19 — The Parliamentary Public Accounts Committee (PAC) today urged the Ministry of Finance (MoF) to be more proactive in solving problems that arise for real estate development management in two Langkawi projects.
In a statement today, PAC chairperson Datuk Mas Ermieyati Samsudin said that as a core ministry in the nation's administration, the MoF should not have waited very long to sort the lease issue of St Regis Langkawi and the Kampung Tok Senik Resort.
“This considering the shares owned by these two companies belong to the MoF either through the Minister of Finance Incorporated (MoF Inc) or Lada," she said, referring to the Langkawi Development Authority.
Mas Ermieyati said that during the PAC’s proceedings, it found that the land used to build the luxury hotel was still owned by Lada.
She said it also found that the lease agreement between the hotel’s operator, INR Sdn Bhd, and Lada had not been finalised.
The PAC additionally discovered that the MoF was effectively the majority shareholder in INR through a 30 per cent direct stake and another 30 per cent through Lada, with the remainder held by Indonesian conglomerate Rajawali Group.
The PAC chairman said this meant the onus was on the MoF to resolve the matter amicably with the state government, adding that the issue caused INR to be RM27 million in arrears on a RM246 million loan it took to develop St Regis Langkawi.
"As for the Kampung Tok Senik Resort project, PAC found that Lada was negligent in allowing Maju Holdings Sdn Bhd (MHSB) to put the land as collateral to Perwaja Terengganu Sdn Bhd (PTSB), resulting in Lada losing land ownership for Kampung Tok Senik Resort.
"Overall, PAC found seven main issues involving the property development management under Lada and MOF, with two issues involving the lease management of St Regis Langkawi and the Kampung Tok Senik Resort, causing Lada to fail to collecting the lease revenue for the two projects," Mas Ermieyati added.
She said that the PAC made six conclusions, which includes Lada failing to collect RM660,000 a year for almost five years for a total of RM3.19 million, and MOF facing obstacles to sell the St Regis Langkawi to settle INR's debts.
The PAC also directed the MOF to submit a comprehensive rescue plan for St Regis Langkawi, which includes debt restructuring, hotel management and the way forward for the hotel, in addition to the status of audit firm Deloitte as its receiver and manager (R&M).
The PAC said that Lada needs to also improve its competency in managing projects that are being implemented, in order to be completed according to the timeline, quality and returns as targeted.
Mas Ermieyati said that PAC will also conduct work visits and more proceedings on this issue in June.
