Firm claims 3% of PKFZ loan for advisory services
By: R. Nadeswaran and Terence Fernandez (Thu, 04 Jun 2009)
KUALA LUMPUR (June 4, 2009) : Claiming that it assisted the Port Klang Authority (PKA) to terminate a management agreement with the Jebel Ali Free Zone International (JAFZI) and that it used its resources to help secure a RM4.632 billion loan from the Finance Ministry, a secretarial firm is seeking 3% of the amount – RM145 million.
In its statement of claim filed at the High Court on Monday, Mega-Wan Corporate Services Sdn Bhd is also claiming an additional RM1.9 million for three consultants to work on the project over 202 days at RM3,000 per consultant per day – bringing its total claim against PKA to RM147.8 million.
The company, which named PKA as the defendant in the suit filed through Messrs Nik Saghir and Ismail, said that it was appointed as PKA’s corporate advisor to provide corporate advisory services effective Jan 15, 2006.
It also claims to have rendered “advisory services and carried out re-engineering services to PKA to facilitate the appeal on terms on conditions of the loan from the ministry for RM4.6 billion for the Port Klang Free Zone project.”
Mega-Wan, the statement of claim said, also submitted reports, made recommendations which the PKA subsequently submitted re-engineered cash flows and appeals which resulted in the “ministry agreeing to revise the terms of the soft loan agreed previously.”
“The works carried out by the plaintiff included putting in place various control tools and management policies of the defendant (PKA), ensuring compliance of the guidelines set by the government for government owned companies (GOCs) and government linked companies (GLCs) and government policies and regulations.
“JAFZI refused to comply and co-operate with the defendant and this led to various deadlock situations including JAFZI making copyright claims on the structures of PKFZSB. Plaintiff had taken actions to advise the defendant to address and review the financial and general mismanagement of PKFZ by JAFZI which included addressing the copyright claims. (The) plaintiff also advised and assisted the defendant to review and assert their legal rights and powers under the management agreement.
“However, the non co-operation by JAFZI to comply with the defendant’s instructions and requirements had eventually led to an impasse resulting in the mutual termination of the management agreement between JAFZI and the defendant without any claims for compensation made by JAFZI including payment for services rendered,” Mega-Wan said in its statement.
Without its involvement to handle JAFZI, Mega-Wan said, the project would have turned into a major disaster for the “PKA, the Ministry of Transport (MOT) and the nation.”
“The cost to the nation/PKA which if translated into monetary terms would have been much higher than the committed approximate development cost of RM4.632 billion as it would involve the payment of management fees to JAFZI for 15 years, the disbursement of funds to manage PKFZ as per JAFZI’s multi-million ringgit budgets and other costs attached to the project such as interest amount payable.
“The plaintiff’s involvement in the project since December 2005 has been the most notable factor which contributed to the defendant’s realisation of the weaknesses and disadvantages in the management agreement with JAFZI,” it claimed.
It contends that as a result of this, PKA was able to re-position itself on the correct track and steer the PKFZ project as envisaged by the PKA and the Ministry of Transport.
Meanwhile, PKA said that the matters are in the hands of their lawyers who would take necessary action to strike out the suit.