Overvalued Selangor

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By P Kamalanathan

Earlier today I had the opportunity to visit the overvalued Ulu Yam Hill-Slope land along with YB Dato’ Chua Tee Yong.

One thing for sure, from deals like this, one can only come to conclusion that there is a serious lacking of transparency and competency by the Pakatan Rakyat Selangor (PRSelangor)

I would like to share information with regards to the Ulu Yam Hill-Slope land issue and I’m sure that you would be able to make a reasonable conclusion. My appreciation to Y.B. Dato’ Chua Tee Yong for highlighting this issue and allowing me to share the following information;

1. In 2010, PRSelangor government accepted a 60% shares in a company called Ulu Yam & Country Club Sdn. Bhd. (Company) at RM4.2million. The remainder 40% is held by a subsidiary of KHSB.

2. This company has not commenced operation since incorporation and has liabilities of RM807,000 as at 31st January 2010.

3. The only asset of the company is a 199 acres of Ulu Yam hill-slope land. Thus the value of the shares of the company is dependent on the hill-slope land.

4. This is the third piece of hill-slope land accepted by PRSelangor state government from the Talam deal. These hill slope land are Class 3 & Class 4 slope that is above 25 degree and above 35 degree respectively.

(Note: Class 3 (C3) hill-slope development rules are strict and for Class 4 (C4), only development allowed is for national infrastructure project. In 2009, the PRSelangor Government had frozen all development plans on C3 and C4 land pending new guideline on hill-slope development.)

5. KHSB has rejected first proposal of PRSelangor government proposal for KHSB to acquire the 60% share at RM4.2 million on 3rd May 2010.

6. Subsequently, a second proposal by PRSelangor government to KHSB was made whereby KHSB has done a valuation on the hill-slope land on July 2011 by Sulaiman & Co. the 199 acres is only worth RM5.0 million.

7. Thus at 60% of the shares in the company whose asset is only hill-slope land would be worth RM3 million. Compared to 2010, when PRSelangor accepted a 60% shares at RM4.2 million, there is a depreciation/drop in value of RM1.2 million.

8. There is an apparent overvaluation of RM2.1 million for the 60% shares on the Company.

9. PRSelangor government should have consulted KHSB before accepting the 60% shares as KHSB owns 40% of the shares.

10. Did the PRSelangor State Government conduct an independent valuation carried out by the state valuer?

11. Was there an independent financial and/or legal due diligence being carried out and was the liabilities of RM807,000 taken into account?

12. From this deal we can see there is lack of transparency and competency by PRSelangor government, for accepting 60% overvalued shares of a company where the only asset is class 3 and 4 hill-slope land and having liabilities of RM807,000.

In summary, what YB Dato’ Chua Tee Yong have exposed in the Talam deal by PRSelangor government is as follows;

a) Overvalued land that is underwater or forest & ecology zone;
b) Overvalued land that is ex-mining pond;
c) Overvalued office units and retail lot that are vacant;
d) Overvalued Hill-slope land Class 3 & 4, and now
e) Overvalued shares of a company.

Total apparent overvaluation;

a) Bestari Jaya (RM42million to RM100million);
b) Danau Putra (RM57million);
c) Menara Pandan Office lots (RM1.9million);
d) Hill-slope Ulu Yam land (RM5.3million), and
e) 60% shares (RM1.2million)

TOTAL: RM107 million to RM165 million.

– YB P Kamalanathan MP of Hulu Selangor, Selangor