KUALA LUMPUR, March 9 — Duplicate claims by Port Klang Free Zone’s (PKFZ) contractor discovered during the audit of the project had prompted the Port Klang Authority (PKA) to lodge a police report, Datuk Lee Hwa Beng testified today.
Testifying at the beginning of former PKA general manager OC Phang’s trial for criminal breach of trust and cheating today, Lee said an audit by PriceWaterhouseCoopers found Kuala Dimensi Sdn Bhd (KDSB), PKFZ’s turnkey contractor, had billed the port authority for work that was included in the price of land sold by the company.
“Two legal firms scrutinised the audit report for legal implications. Finally, the PKA board instructed me to make a report,” he was quoted as saying by news portal The Malaysian Insider today.
The double billing involved the construction of a storm drain and installation of a water supply.
Phang was charged in a Klang Sessions Court in December 2010, along with KDSB chief operating officer Stephen Abok and BTA architect Bernard Tan, with three counts of criminal breach of trust and cheating amounting to about RM380 million.
Also charged was former KDSB project director Law Jenn Dong, for allegedly making 24 fraudulent claims totalling RM116.85 million.
If convicted, Phang faces a maximum of 20 years’ jail and a fine on each charge.
Phang’s trial, as well as the others, was previously stayed pending the High Court’s disposal of Tun Dr Ling Liong Sik’s case.
In October 2013, the High Court acquitted Dr Ling of having cheated the Cabinet into approving a land purchase for the PKFZ project, ruling that his lawyers had raised reasonable doubt in the prosecution’s case.
The prosecution declined to appeal Dr Ling’s acquittal.
Last October, the PKA also withdrew its RM720 million lawsuit against KDSB, leaving Phang, Abok and Tan’s cases as the only ones still pending in the multi-billion scandal.
Dr Ling had pitched the idea to create a free trade zone at the Port Klang area and turn it into a regional integrated cargo distribution and industrial park in 1997, when he was then the transport minister.
It was originally to have cost RM1.1 billion but this later grew to RM4.6 billion in 2007, before an audit by accounting firm PricewaterhouseCoopers commissioned by Ong in 2008 showed that the total cost including interest payments was projected to hit RM12.5 billion.
Phang’s trial will continue tomorrow.