Wednesday, July 18, 2012
Dr Ling also told the court that he could not understand JPPH’s valuation of the land, saying it was very “confusing” to him
Tun Dr Ling Liong Sik admitted during his cheating trial today that he does not understand the purpose behind the issuance of bonds to finance a property purchase.
Dr Ling, who served as Malaysia’s transport minister for 17 years until 2003, told the High Court that while he has heard of bonds, his knowledge on the matter is limited to what he reads in stock market reports.
“That’s all I know,” he said to a question from lead prosecutor Datuk Tun Majid Tun Hamzah during cross-examination this afternoon.
“What about bonds for purchasing property? Or bonds to finance a purchase?” Tun Majid asked.
Shrugging, Dr Ling said, “No.”
“So you have never heard about people raising bonds to finance a purchase?” Tun Majid continued.
“No. They may be doing it but I don’t know how to do it and I don’t understand its purpose,” Dr Ling replied.
The former MCA president was being questioned about a letter from then Valuation and Property Services Department (JPPH) director-general Datuk Sahari Mahadi to his ministry on September 29, 2000, which detailed the valuation of a 999.5-acre plot of land to be purchased for the Port Klang Free Zone (PKFZ) project.
Dr Ling is on trial for allegedly deceiving Cabinet into approving the purchase from turnkey developer Kuala Dimensi Sdn Bhd (KDSB), which had later resulted in wrongful losses for the government.
He also faces two alternative charges of deceiving the Cabinet into believing that the terms of purchase — at RM25 psf and 7.5 per cent interest — were acknowledged and agreed to by JPPH despite knowing that there was no such agreement.
According to the letter read out by Tun Majid to the court today, JPPH had stated that a value of RM25 psf “and above” for the land in Pulau Indah “can be considered” for the purpose of the issuance of bonds.
“Taking into consideration the financial terms above and using the ‘discounted cash flow’ (DCF) method whereby the target rate is set at 8.25 per cent, the coupon interest rate at 6 per cent and a repayment of term of 10 years, it is found that the ‘land value’ of RM25 psf and above can be considered for the purpose of the issuance of bonds although the land value is only RM21 [psf],” Tun Majid read.
A figure higher than RM25 psf can be considered as the period is 15 years.”
But Dr Ling told the court that he could not understand JPPH’s valuation of the land, saying it was very “confusing” to him.
“I find this 8.25 per cent very complicated... how do you get 8.25 per cent?” he asked.
“So you mean to say you don’t understand the whole letter?” Tun Majid asked.
“Yes,” Dr Ling said.
Tun Majid continued, “I further put it to you that it was not just RM25 psf... but a figure of more than RM25 psf can be considered if it (repayment) is for 15 years and that it is for the purpose of issuance of bonds.”
“As I told you, I don’t even understand a lot of these things... how this 8.25 per cent was derived so if I don’t understand these things...,” Dr Ling trailed off.
Dr Ling faces a possible jail term of up to seven years, or a fine, or both, if convicted on the first charge under section 418 of the Penal Code.
The alternative charges carry a lighter sentence of five years’ jail, or a fine, or both.
The trial before Justice Datuk Ahmadi Asnawi resumes on September 24.