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Potential PNSB breach of banking rules

SHAH ALAM, 25 Feb 2009: Permodalan Negeri Selangor Bhd (PNSB) may have breached banking rules by failing to declare conversions of large sums of ringgit into foreign currency in its purchase of properties in Saudi Arabia in 2007.

Selangor Menteri Besar Tan Sri Abdul Khalid Ibrahim said the unauthorised RM25.6 million paid by PNSB for 12 properties instead of an approved five in Mecca would have involved a currency exchange that should have been reported to Bank Negara.

“But the transaction was paid in ringgit. It means the property was bought in riyal but paid for in ringgit. There may be an element of non-reporting to Bank Negara with regards to the transaction,” Khalid told reporters after the Selangor executive council’s weekly meeting at the state secretariat building today.

Khalid said his predecessor Datuk Seri Dr Mohammad Khir Toyo was the one who signed the transaction without the PNSB’s board of directors’ sanction.

PNSB is a wholly owned subsidiary of the Selangor government.

Khir was then chairperson of PNSB, and had disclosed in a December 2007 board of directors’ meeting that the properties were under his name.

The Pakatan Rakyat-led state government recently uncovered irregularities in PNSB’s 2007 accounts regarding property purchases in Mecca.

On record, PNSB had approved RM8.35 million for the purchase of five units, but RM25.6 million was subsequently disbursed for 12 units.

Seven units were then sold to an individual for RM17.25 million without any official receipt to acknowledge the sale.

Subsequently, another RM8 million in four cheques was to have been paid to the same individual, but three cheques were cancelled and only one, worth RM2 million, was banked into the individual’s account.

“We regard this as an irregularity in terms of using a company’s funds in order to do transactions beyond the approval of the board,” Khalid said.

Khalid also refused to identify the individual or to describe his or her capacity when asked.

But he said the person would be identified in due time. The state government would contact the person for explanations, Khalid added.

“Let those involved either deny or agree to what we have issued first,” he said.

The state government may also seek explanations from the two PNSB executives ordered to go on leave pending an audit of the company’s financial records.

Khalid said he would also wait to see the response of those implicated in the case before deciding to lodge a report with the Malaysian Anti-Corruption Commission (MACC).

Asked if this was the first of more revelations on abuse of state funds by the former Barisan Nasional-led state government, Khalid said he would reveal more if there was evidence.

He said the audit on PNSB’s accounts, conducted by a private international firm, is not yet complete.

Audience with Sultan

On allegations against him over the abuse of state funds for the purchase of sacrificial cows and maintenance of his personal car, Khalid said he briefed the Selangor Sultan on the matter today.

Following this, Khalid said he would write to the MACC next week requesting an explanation from the chief commissioner Datuk Seri Ahmad Said Hamdan who had said that there was strong evidence to charge Khalid for abuse of power.              

“The Sultan’s stand is not to oppose the use of personal cars for official purposes if procedures are followed. I have informed the Sultan that all procedures have been followed,” Khalid said.

Khalid added that Sultan Sharafuddin Idris Shah felt that there should be no obstacles to the practice of charity in the purchase of cows meant for the needy.

“In fact, the Sultan encourages all welfare efforts and their extension to Kuala Lumpur, including Bandar Tun Razak,” Khalid said.

Khalid is the Member of Parliament for Bandar Tun Razak.

See also:
Khir Toyo implicated in property transaction

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