SHAH ALAM: The Selangor government has given Talam Corp Bhd three months to settle a total of RM391 million in debts owing and due to the state for its failure to deliver on a number of projects, said Menteri Besar Tan Sri Khalid Ibrahim.
Simultaneously, the state assembly on Nov 9 approved a supplementary budget of RM391 million to Menteri Besar Inc (MBI) pursuant to the debt recovery exercise. MBI will buy the debt from the state government and assume responsibility to recover the debt owing from Talam.
Khalid said the RM391 million debt owing from Talam stemmed from several real estate development joint ventures with state subsidiaries over the past 10 years. The debt collected will be injected into the state consolidated funds.
“Previously, the debt was in most cases neither fully-recognised nor well-recorded in the books of the state subsidiaries as the creditor. No efforts had been made by the previous state government to recognise and claim the debts and the state will risk writing off the debt if no proper action was taken,” he said in a statement.
Speaking to The Edge Financial Daily here on Nov 9, Khalid said the state would undertake an audit of the state subsidiaries accounts and had determined that over RM500 million was owing from Talam, which disputed the figure. He added that both parties settled for RM391 million.
“We have given Talam a three-month deadline,” Khalid said, adding that the company faced the prospects of foreclosure on its assets and properties if it failed to pay up by then.
“Previously, we (the state) was at the lower rung of creditors, now we want to be at the top rung,” he said. Khalid added that Talam was undergoing a restructuring exercise, which should include the settlement of the amount owing to the state.
In its 2009 annual report, Talam said it had been unable to meet its financial obligation to bear the development and maintenance costs of about RM134 million in the Universiti Industri Selangor (Unisel) project, whereby the state had alienated three parcels of land to the group for the development of Unisel.
Talam said it had agreed to settle the obligation by transferring 1,715.9 acres of land in Batang Berjuntai valued at RM80,000 per acre to Kumpulan Darul Ehsan Bhd and Pendidikan Industri YS Sdn Bhd, both nominees of the state government.
This article appeared in The Edge Financial Daily, Nov 10, 2009.
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