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Trinity denies state funds used in rescuing company

KUALA LUMPUR (July 5): Trinity Corp Bhd, formerly known as Talam Corp Bhd, has denied allegations the company was bailed out by the Selangor government.

In a statement to Bursa Malaysia yesterday, Trinity refuted allegations by MCA Young Professionals Bureau chief Datuk Chua Tee Yong that the company had come out of its PN17 status as a result of the state acquiring land from Trinity, reducing its debts. Trinity acknowledged that the group owed the state RM391 million.

However, the company stated that it had come out of PN17 status on its own and its regularisation plan was submitted to the Securities Commission (SC) on Oct 25, 2007 before the state was taken over by Pakatan Rakyat.

The plan was approved on April 29, 2008. Trinity also said when the submission was made, the company had “no clue” the state would require it to repay the debt.

“When the submission was made to the SC, there was certainly no clue of the fact that Talam would [in the future] be compelled to pay the debt due and owing to the state by way of land,” said Trinity.

“Hence, it is wholly untrue to allege that there was a bailout of Talam by the state using the rakyat’s money,” said the group. To clear the debts owed to the state, Trinity disposed of land worth RM676 million.

“It was not possible for Trinity to dispose [of] land equivalent to the sum owing the state as the land was charged to [a] financial institution.

“Trinity disposed of land worth almost RM676 million in order to clear the RM392 million debt and the encumbrances attached to the land as it is a normal commercial practice,” said Trinity, adding that the transaction was disclosed at the company EGM and there is also a legally binding agreement between the state and Trinity.

The group said Chua may have been misinformed when he alleged the state had acquired the land to the tune of RM392 million and also bought additional assets from Talam for RM284 million.

Trinity said all its conduct and dealings with the state were justified to both Bursa and the SC as it is a public listed company. “The valuations were done by independent valuers, besides being scrutinised by the SC’s Assets Valuation Department and Bursa to determine the exact value of the land prior to the land being transacted,” said the group.

The company said it was baffled by two other statements made by Chua with regard to a RM1 billion questionable deal and the outstanding debt of RM115 million in Kumpulan Hartanah Selangor Bhd. “We must state for clarity that Trinity has not benefited from the transaction in any manner except to have its debts paid off.

“The benefit is certainly to the state as the land possessed by the state has now appreciated in value and it is certainly for the benefit of the rakyat as opposed to the detriment of the rakyat,” said Trinity. Earlier yesterday, the state government announced it would take legal action against MCA and individuals who have made allegations of misappropriating public funds linked to a debt recovery exercise involving Talam.

“Not only are these allegations false and serious, they have also smeared the Selangor governments good name,” Menteri Besar Tan Sri Khalid Ibrahim told a press conference after chairing the state executive council meeting. Khalid, however, declined to give any explanation in the light of the impending lawsuit. “We will be filing a notice very soon,” Khalid said.

“So I won’t issue any explanation now because I don’t want to interrupt the procedure.” He also declined to name specific individuals or refute Chua’s allegations, saying this would go against their solicitors’ advice.

In a press conference on Tuesday, Chua challenged the Pakatan Rakyat government to explain the deals amounting to RM1 billion, which he said comprised a “bailout” of Talam, purchase of assets from Talam and unpaid debt to state companies.

The challenged the Selangor government to release a white paper as promised in 2010. He further demanded that the state government disclose all acquired assets and their valuation or basis in the deals. Chua has scheduled another press conference today to speak on this issue.

This story appeared in The Edge Financial Daily on July 5, 2012.

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