18 Jan 2018

English subtitles of video screening by MCA President Datuk Seri Dr Ir Wee Ka Siong on Penang Undersea Tunnel during press conference at MCA Headquarters

Amid changes in their shareholding structure, what has happened to the two financially and technologically formidable companies?

Dear Chief Minister YB Lim Guan Eng. You have been holding several press conferences these past few days, speaking at length on the Penang Undersea Tunnel.

First of all, please do not lash out needlessly in anger. I believe that after so many years, there are surely much doubt in the hearts of the people. For once, please clearly inform us on what has happened.

Let us look at back to 2011, 2012 and 2013. The first time when the Chinese Premier and YAB Prime Minister of Malaysia signed a memorandum between both countries. I well recall that one of the projects involved was the Penang Undersea Tunnel.

After the signing, I believe CM Lim Guan Eng has also pledged to the rakyat several times that the Undersea Tunnel would involve two very large-scale companies, and especially in 2012, prior to the 13th general election.

On 4 March 2013, you directed the State Secretary and the Finance Officer to announce that the Special Purpose Vehicle (SPV) for the Undersea Tunnel project had been awarded via a joint venture with four major shareholders. What you told the people is this:

According to the Penang state-run publication Bulletin Mutiara:

Zenith Construction Sdn Bhd together with China Railway Construction Corporation Ltd (CRCC) hold 70% equity;

Beijing Urban Construction Group (BUCG) has 10% equity; while the two remaining companies,

Sri Tinggi Sdn Bhd has 10% equity; and

Juteras Sdn Bhd has 10% equity.

However, after a few years, once we have carried out a review, it was found that based on the latest report from Bursa Malaysia, the latest shareholding which is related to the SPV is as follows: Zenith Construction: 47.12%

At this point, I believe the important question must be asked: that you have not brought up the company comprising Zenith Construction and CRCC, both of which held 70% shares together. Instead, today we only see the name of Zenith Construction with 47.12% shares. I believe you need to explain; in the end is CRCC a shareholder or not?

In fact, we still remember that, based on what we saw on the video clip,  there are two companies. You were talking about BUCG, which built the Bird’s Nest Stadium for the Olympics. They also do a lot of metro building business, including a complex railway project to be built by China Railway Construction. You used the two companies as an example. At that time, many people believed what you said and thought that you really wanted these two companies to complete the project.

So the key question today is: where did both these companies go after the latest shareholding changes of these two companies BUCG and CRCC?

At that time, when you approved the SPV, the condition at the time was that they had to have sufficient financial resources, and particularly technological know-how, and at the time, you told the people how capable these two companies were.

Now, the words you used were wrong. You say it is a very serious project. I would correct you on a tiny detail. In fact, this is a very large scale project, and cannot simply be given to just any company to undertake.

At that time, you remarked that the company must have financial resources and technology prowess. From this perspective on the latest shareholding, the Chinese company BUCG, is no longer there. BUCG originally owned only 10% of the shares.

Look at the recent hubbub of Vertice Berhad (formerly VOIR Holdings Berhad), which has a 13.21% shareholding that is higher than the construction company.

CM Lim, you said this is a private transaction and that you are not aware of it. Can a 10% shareholder play such an important role, while a 13.21%, shareholder acts as merely a SLEEPING PARTNER,  which does not care about the business but rather, acts purely as investors? I believe you should answer these questions.

Secondly, we always say that technology and financial resources are very important. Look at what your State Secretary said on 4 March 2013. At that time, in refuting that the company was an RM2 paid-up capital company, you said that the paid-up capital of the consortium of four companies was as high as RM4.6 billion. Clearly, a consortium of RM4.6 billion should be absolutely capable of construction.

But today, China Railway Construction Corporation and BUCG do not appear to have any stakes in the SPV. I think you must give a clear account on this arrangement.

Of course, one must look at the shareholding of the other firms. Juteras Sdn Bhd has changed from 10% to 0.75%. Why is Kenanga Nominees (Tempatan) Sdn Bhd holding 38.92%?

As a state government, if such a massive project is handed over to another company and the shareholding changes or any changes are made, the state government certainly has the power to make some decisions. At least, they must inform you as Chief Minister.

CM Lim, please address clearly these questions. Meantime, we still have many questions to ask you.

Datuk Seri Dr Ir Wee Ka Siong
MCA Deputy President
Member of Parliament for Ayer Hitam
Minister in the Prime Minister’s Department

-MCA online-