July 8, 2012
Nathaniel Puts TALAM in Perspective
(07-07-12)@www.malaysiakini.com
COMMENT: "Confusing" substantially describes many of our primary attempts to get to the bottom of what the deal was between Talam Corporation as well as Selangor.
With the small diligence, transparent thinking as well as attention to item however, many mysteries can be giveaway as well as articulated efficiently.
This essay attempts to explain in easy to assimilate terms the credentials as well as context of this issue, how Selangor recovered the debt due to it by Talam, as well as how this debt liberation differs from the bailouts you have seen during the sovereign level.
In the Beginning
The story starts in the late eighties as well as early nineties, with an operative and
project physical education instructor who worked in Selangor state auxiliary PKNS the singular Chan Ah Chye (right).
This man after goes upon to form Talam Corporation, as well as before prolonged presumably due to close connectors with the statute elite in Selangor, then headed by BN Menteri Besar Muhammad Muhammad Taib he becomes the vital player in the Selangor skill as well as growth scene.
Over time, an intensely vast volume of state land is alienated to Talam, who fundamentally gets it for free. A strong imagination is not compulsory to speculate in whose pockets any ensuing distinction in the future ends up.
Talam's! modus o perandi seems to be to oath this land to the bank in exchange for outrageous loans, which they then make use of to financial their growth as well as distinction creation projects. In essence, since they got the land free, they have successfully completed income for nothing (it is uncertain as to whether "chicks for free" were involved).
The 'wise' businessmen of which era believed in the decree of never using your own income when you can make use of someone else's. This difficult lending the singular after an additional to characterize Talam's commercial operation approach, as well as their loans consistently kept removing bigger as well as bigger.
Tumbling down
Of course, no student of brand new economic trends is unfamiliar with the concept of the bursting bubble.
The financial collapse of the late nineties brings Talam's debt-ridden house of cards crashing down. An overgearing of loans as well as inability to use them halts assorted half-completed projects, rendering them idle, half-built ruins.Incredibly however, this does not forestall Talam as well as their domestic patrons from altering their elementary modus operandi.
In 2001, underneath BN Menteri Besar Khir Toyo (left), 3 parcels of land have been alienated by Selangor to Talam around their auxiliary Maxisegar Sdn Bhd, who undertakes to erect Unisel's campus during an estimated cost of RM750 million.
It will substantially come as no warn which Talam failed to finish this project. By September 2006, the association had been classified as an influenced association underneath Practice Note seventeen (PN 17), indicating dire financial straits.
New Sheriff in town
In 2008, when Khalid Ibrahim assumes the Mente! ri Besar 's post, he inherits the situation in which Talam owes the state of Selangor as well as the subsidiaries (among alternative creditors), the good deal of money.
Urban fable has it which when Talam was called in to explain why they have never endeavoured to pay their debts, the humble reply since was, "No the singular ever asked us to."
Thankfully for the citizens of Selangor, there was the brand new policeman in town.
Corporate financial is not usually an area of expertise for Khalid (left) it is the passion. With good gusto, he set out to compromise this problem, as well as recover which which was due by Talam to the people of Selangor.
The complaint was positively challenging, but after the small work as well as clever strategising, the plan was set in to motion.The finish idea was simple: to leverage the resources still held by Talam to pay off the debt Talam due to the Selangor as well as the state subsidiaries.
The technical nitty-gritty
Making this happen was the technically difficult routine which compulsory substantial financial acumen.
The outline is this: firstly, the debts which were due by Talam to Selangor state subsidiaries were scrupulously requisitioned as well as accounted for something that, very suspiciously, had not been finished before. Once these debts were acknowledged by all parties, the debts were combined as well as eliminated to the singular state auxiliary Menteri Besar Incorporated (MBI), which was then obliged for pciking up the debts from Talam in the form of land as well as cash.
The rest of this territory explains how this was done.
It is the tedious as well as formidable explanation, but I list it here for the record as well as for those interested.
Talam due RM392 million to 3 Selangor state subsidiaries: KHSB, PIYSB, as well as PNSB. After acknowledging as well as engagement these debts, the subsequent step was to have an additional state subsidiary, Selangor Industrial Corporation (SIC), squeeze these debts from the alternative 3 companies.
A loan from CIMB Bank of RM 392 million was since to SIC to finish this purchase. In November 2009, the state exco as well as legislative assembly both approved the accede to of RM392 million to MBI, which then used the supports to squeeze the strange combined debt from SIC. SIC then uses those supports to pay off their CIMB loan.
The finish result is as elementary as the contract itself is formidable but any vital or excessive transactional expenses, Talam right away owes the same volume of income to just the singular state subsidiary, instead of the strange three.
Restructuring as well as successful collection
It is important to note which during no point have been supports eliminated from taxpayer monies to Talam. Funds have instead usually been eliminated from the singular pocket of the state to another.
This differs wildly from sovereign bailouts of corporations similar to Indah Water Konsortium, MAS, or the Putra/Star LRT, where taxpayer income was injected directly in to companies which had substantially lost untold amounts around mismanagement, corruption as well as plundering.
The transfers in the Talam debt restructuring allowed for the make up in which there is the transparent confirmation as well as accounting for the RM392 million due by Talam, as well as the singular association for them to pay it to.
The story does not finish there.Another intensely important milestone in this story i! s which MBI has in fact already succeeded in recovering all RM392 million in debt due by Talam.
For those who would similar to to keep score, this liberation came in dual forms. RM340.88 million was recovered around acquisition of land as well as assets: 1,322 acres of land in Bukit Beruntung value RM150.28 million, 2,264 acres of land in Bestari Jaya value RM105.3 million, 400 acres of land in Ulu Yam as well as 60% equity in Ulu Yam Golf & Country Resort value RM22.2 million, 134 acres of land in Danau Putra value RM52.1 million as well as five bureau units in Menara Pandan value RM11.1 million.
The superfluous RM51.12 million was collected in cash: RM12 million from sales of land in Puncak Jalil, RM5 million in income assignments from EON, RM7.68 million in payments by Unisel for earthworks, RM9.04 million from the sale of 25.94 acres of land in Bukit Beruntung, as well as RM17.4 million from sales of 218 acres of land in Bestari Jaya.
Go ahead, equate it it's all there.
Facts trump hype again
How can you summarize this? For some-more than the decade underneath BN, the singular house due the state hundreds of millions of ringgits.
Within the year or dual of taking over, Khalid managed to pick up upon these debts, now augmenting the volume of income accessible to spend upon gratification programmes throughout Selangor.
Scandal?
Yes, it's the scandal which Talam was allowed to get the giveaway lunch it did underneath BN, as well as it's the scandal which it took this prolonged for to emanate the shift in government which succeeded in cleaning up the mess.
It would be scornful to indicate which this essay is patrician privately in the hopes which Chua Tee Yong (left) wo uld take the time to carefully peruse the contribution within. Nevertheless, maybe he might find the exercise profitable in his longer tenure efforts to maintain what small credit he has left.
Said credit is shrinking during about the same rate during which he is shortening the volume of income claimed to be 'misused' by Selangor from RM1 billion, to RM260 million, to RM42 million. Before long, he might have to magnitude in sen instead.
Perhaps Chua fancies himself the Rafizi Ramli. What he fails to assimilate however, is which Rafizi's exposes have been not just all about 'glamorous' press conferences as well as big numbers. Behind each display is the ton of tough work as well as solid research.
Behind Chua appears usually to be blind aspiration which extends distant over ability, as well as the shameful mainstream media which think which hype can overturn facts.
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