Is Pahang’s coffers running dry?

State government's attempt to reach a RM10 million out-of-court settlement with logging firm, which is owed RM70 million, prompts DAP to ask if its near bankruptcy

KUALA LUMPUR: Logging company Seruan Gemilang Makmur (SGM) accused the Pahang state government of deliberately refusing to pay a RM70 million debt owed to them.

Company manager Lee Sin said that the state government even defied a court order to cough up the payment.

“Our company has obtained a court order to compel the Pahang state government to pay the judgment sum, which now stands at RM70 million.”

“But until today it has refused to pay up despite the order having been served on the state government,” he told reporters at the Parliament lobby today.

SGM first filed a suit against the Pahang government over a breach of contract in 2002 and 2007, which resulted in the Kuantan High Court ruling in the company’s favour.

According to a statement by SGM, the Pahang government was ordered to pay RM37,127,471.60 with an additional annual 8 percent interest from “Dec 31, 2000 till payment”.

The total would come close to RM70 million. The Pahang government then appealed against this decision, but was later quashed by the Federal Court.

However, Lee claimed that they have yet to see this money come their way.

He also said that the Pahang government tried to reach an out-of-court settlement for RM10 million with SGM last year.

He added that SGM had rejected the offer, saying it was too low a figure to accept.

Shareholders’ hunger strike relay

DAP MP Tan Kok Wai (Cheras) asked why the state government had offered a much lower amount than what was intended of them.

He said that this attempt indicated that the Pahang’s state coffers were empty.

“It is the statutory duty of the state government to pay up its dues… Clearly the state government may be bankrupt.

“A sum of RM10 million may be the maximum amount of money that it can afford. So, is the Pahang government near bankruptcy? Otherwise, why is it defying the court order?” he asked.

Tan also brought up Pahang’s foreign direct investments (FDIs) as an example. He alleged that the state’s 2010 FDIs were much lower than Kelantan’s.

He said the lack of FDIs may have forced the state government to bring in companies that were “detrimental to health”, such as the cyanide factory in Bukit Koman, Raub, and the Lynas rare earth plant near Kuantan.

Pokok Sena MP Mahfuz Omar (PAS), who was also there to lend his support, threw a challenge to Prime Minister Najib Tun Razak.

He said that Najib, who was also former Pahang menteri besar, should advise the state government to compensate SGM for its losses.

Earlier last month, the disappointed shareholders staged a hunger strike relay in KL to protest against Pahang’s refusal to pay.