Former director raises questions on Perak Corp's scheme of arrangement with creditors

KUALA LUMPUR (June 9): Perak Corp Bhd’s former director Chong Zhemin has raised queries on the financial accounts of the state-owned company, particularly on the deviation of its assets declaration in its scheme of arrangement and the latest annual report.

Chong, who is also Keranji State Assemblyman in Perak, had lodged a police report against Perak Corp on alleged commercial crime at the Dang Wangi District Police Headquarters on Thursday (June 9).

The DAP lawmaker alleged that the listed state-owned firm owns more assets than it declared in its scheme of arrangement, citing Perak Corp’s recent disposal of its entire 49% stake in VC Telecoms Sdn Bhd for RM12.5 million as an example.

To recap, Perak Corp has proposed a debt waiver of RM123.61 million or 88% of its outstanding liabilities to be settled under the scheme of arrangement.

Based on Perak Corp’s scheme of arrangement, which was filed with Bursa Malaysia on March 26 last year, the group’s outstanding liabilities to be settled under the scheme was RM140.12 million, of which RM89.44 million or 64% are intercompany creditors as at June 30, 2020, while RM36.12 million or 26% are categorised as “other creditors”, the remaining RM11.78 million and RM2.77 million are “contingent” and “essential” creditors.

“These 12 assets are just a tip of the iceberg, because they only disclose their key assets. They have more assets, I hope the police will investigate this,” he told reporters after lodging the police report at the Dang Wangi District Police Headquarters.

“These assets are recorded at book value, they were acquired between 1995 to 2017, so they might be worth more after revaluation. This is the first police report we made, but I have brought up this issue during the Perak State Assembly, but the State government did not take any action,” he added.

Chong said among the 13 assets that are stated in the company’s latest annual report only the 247.85-acre piece of vacant land in Hulu Bernam Timor was declared in the group’s scheme of arrangement.

As the other 12 assets were not taken into account in Perak Corp’s scheme of arrangement, Chong alleged that the group did not declare the actual amount of assets it owns when obtaining approval for the scheme at the Ipoh High Court in 2020.

Perak Corp’s annual report shows the 13 properties it owns, including four pieces of vacant land measuring 27.21 acres to 247.85 acres in Mukim Hulu Bernam Timor, District of Mualim in Perak. The group also declared another two pieces of vacant land in Mukim Ulu Kinta in District of Kinta, Perak, whose land sizes measure 50 acres and 29.56 acres respectively, plus a 7.34-acre piece of freehold land used for hotel and office operations.

The plots of vacant land have an aggregate area of 504.27 acres.

Apart from the plots of land, the group also declared properties involving six plots of land measuring 233.75 acres that are used for port operation in Lumut, Perak.

Perak Corp manages Lumut Port through its 50% plus one share stake in Lumut Maritime Terminal Sdn Bhd, which contributed half of the group’s total revenue of RM245.24 million last year.

The company recorded divestment gains from several land sales in 2021.

Chong claimed that interest of Perak Corp’s minority creditors may have been neglected in the scheme of arrangement.

“The scheme of arrangement is approved by the High Court, by virtue of 75% of creditors’ consent, but if you check these creditors, they are mostly inter-company creditors, it is all among themselves, PKNP (Perbadanan Kemajuan Negeri Perak) is creditor as well,” he said.

“Other creditors don’t have a say because within their inter-company creditors they already make up 75%, so they are coming up their own scheme and approving their own scheme,” he added.