Another BN family scandal: Soi Lek's brother and RM90mil in cash cheques
It looks like another family scandal has broken out in corruption-riddled BN, coalition that ruled Malaysia for the past 5 decades. This time, it involves Chua Chong Seng, the brother of MCA president Chua Soi Lek,
"As they say, every dog has its day. You can't hide the truth forever. Obviously, BN leaders and their families have run wild because of the absolute control they held over the country. They were supreme and answered to no one. This is what gave them courage to pillage and plunder," PKR vice president Chua Jui Meng told Malaysia Chronicle.
"Look at the NFC scandal. So many millions have been misused and Shahrizat Jalil thinks she is justified in holding on to her party post. If not pressured by the Pakatan Rakyat, I don't think she would have given up her Cabinet position."
More public disenchantment and odium for the MCA
Jui Meng, a former MCA vice president and Health minister, was referring to former Women's minister Shahrizat Jali, whose husband and three children have been accused of abuse of power and misusing a RM250 million government soft loan to benefit themselves.
Soi Lek himself is already facing an uphill battle to win back the hearts and minds of the Chinese voters, who scorn and accuse him of betraying their rights to benefit himself and gain favor with Prime Minister Najib Razak, whose political support is vital if Soi Lek is to remain MCA president.
Soi Lek, who faces a massive credibility problem due to a sex scandal, has also been accused of nepotism in promoting his son Tee Yong, the Labis MP, ahead of other MCA members. Allegations of 'hot' and questionable business deals have also dogged Soi Lek's career and the latest Xian Leng expose' on his brother can only attract further public distaste and odium for himself and the MCA.
Have you heard of cash cheques for RM90mil?
Police have confirmed Chong Seng is among three people being probed for alleged corruption involving an ornamental fish breeding company called Xian Leng Holdings Bhd. A special audit of the listed firm recently found that Chong Seng, along with other directors, did not follow the group’s accounting procedures in capital expenditure amounting to RM90.7 million for the financial years of 2005 and 2008.
“We have received the report, we will look into and decide the next course of action,” CCID chief Syed Ismail was reported as saying.
According to a company filing with Bursa Malaysia, Chong Seng, who has since resigned, former managing director Ng Huan Tong and his wife Lim Wan Hong had signed cash cheques amounting to RM85.7 million to pay four contractors for the construction of fish ponds. The remaining RM5 million was paid out to 52 contractors.
“The RM85.7 million [out of the total RM90.7 million capex] paid to the four contractors was made under questionable circumstances," said Xian Leng after submitting the audit by PricewaterhouseCoopers Advisory Services Sdn Bhd to the exchange.
"The bulk of the payments were made via cash cheques and there was a lack of corroborative evidence showing that the amount was paid to and/or received by the contractors. The issuance of cash cheques for such large sums of money is a departure from the procedures prescribed by the group’s finance manual.”
As a result of not being able to account for the capex, Xian Leng’s fixed assets have been impaired by RM51.9 million to date.
Chong Seng was the group’s executive director until August 31, 2008; Ng was Xian Leng’s managing director until only three days ago when the group announced his resignation, while third signatory Wan Hong was executive director until her resignation on Dec 23, 2011.
An internal audit found that the issuance of the cash cheques were made via a licensed money changer company, which is 80 per cent-owned by Chong Seng.
Additionally, PricewaterhouseCoopers stated that Chua did not disclose these transactions, which are deemed related party transactions, to the company.
Ng and Lim together own 46.5 per cent of Xian Leng, and are believed to hold more than 51 per cent of the group’s paid-up capital via friendly parties. Due to their majority shareholding, some observers said past attempts by other directors to oust them due to the accounting irregularities have failed.
The audit report stated that no other director, whether past or present, independent or executive, was involved in the issuance of the disputed cash cheques to the contractors. It also stated that the capital expenditure was only highlighted to the audit committee in 2006.