PDC’s termination of Batu Kawan land deal leaves many questions unanswered

I AM glad that the PDC board that met on Monday (Oct 16) terminated its controversial land sale agreement with Umech Land dated Sept 27.

Chief Minister Chow Kon Yeow (main pic) who announced the termination yesterday (Oct 17) said while the PDC’s land sale to Umech Land was fine in terms of the financial capacity and the ability of the latter, the controversial issue was the change in the equity of the company.

In other words, the last-minute change in the equity of the company with the entry of Sunway Bhd taking the majority stake in Umech Land was something that happened without any approval of the PDC or the state government.

This was the reason why the PDC board had no choice but to terminate the sales and purchase agreement with Umech Land.

Chow further announced that PDC would take the necessary steps to bring in new investors for land development in the Batu Kawan Industrial Park 2.

While the PDC faulted the last-minute unannounced share change in Umech Land, it still maintained that the land sale was a legitimate one – that PDC had identified a suitable company, a company that had the financial credentials and others.

While PDC’s termination of the land sale was the right thing to do, why it defended the land sale to Umech Land is something difficult to accept.

People behind Umech Land

It is still a puzzle to me what was the attraction of Umech Construction to PDC? It is still mystery why PDC had to participate in the Expo Dubai 2022 to identify a Malaysian company to do business in Penang.

I would like to know the party or parties that linked PDC to Umech Construction. Who was the mysterious Dubai investor behind the Umech Construction?

What kind of research that PDC did to ensure that Umech Construction was the right party to undertake raw land development in the Batu Kawan area?

While the proposal of Umech Construction was discussed at the level of the PDC, there was no decision made either in the sub-committee or the PDC board to approve the sale of the land.

Perhaps the PDC management should come out and inform the public when the approval was obtained, who participated in the decision making and others.

PDC has defended the land sale deal saying it was a bona fide transaction. If this is so, why the PDC didn’t sign the land sale agreement with Umech Construction but with Umech Land.

Throughout the discussions in the PDC, the reference was only to Umech Construction and not Umech Land. Why the last-minute switch?  Can PDC explain this?

If Umech Land was financially sound according to the PDC, why it had to strike a last-minute deal – two days before the signing of the sales and purchase (S&P) agreement – to sell majority of its shares to Sunway’s wholly owned subsidiary?

Surely, a financially sound company like Umech Land needed no financial assistance. I am sorry for the PDC board might not have given the true picture as to why the land sale became untenable.

Is there an invisible hand?

By focusing deliberately or not on the change in the ownership, the PDC board has failed to explain why Umech Land replaced Umech Construction as the land purchaser.

Since the land sale has been terminated, shouldn’t the PDC management elaborate on how it identified Umech Construction as the potential land purchaser?

Were there any other persons involved in forging the relationship to the extent that Umech Construction came to be identified as a potential investor in Penang?

Given the bad publicity that implicated the state government, it is best that the governance structure of PDC to be reexamined to ensure transparency and accountability.

Key PDC personnel who dealt with both Umech Construction and Umech Land must explain why the land deal went astray.

It is not enough to put the blame on Sunway alone; if not for Umech Land, Sunway would not have been involved in the first place.

Prof Ramasamy Palanisamy

Since the land deal has been terminated, the state government should take the initiative to set up an independent investigation body to ascertain what really went wrong, the parties responsible and what actions need to be taken.

I have a strange feeling that there was a third party that was involved in the land deal. Was it the party that linked PDC with Umech Construction and later Umech Land? Was PDC aware that Umech Construction would be replaced by Umech Land at a certain stage?

If PDC knew this information, why was the PDC board not informed of the matter? Similarly, was the PDC management aware of the possible entry of Sunway in the deal?

The PDC board might have terminated the land deal but many questions remain unanswered. Will the state government be prepared to initiate disciplinary actions against those in the PDC who could have been responsible for the controversial land deal?

As a former director of PDC for 15 years, I urge the Penang state government to do the right thing and not to hide behind the termination.

It is well and good to harp on the slogan of competency, accountability and transparency (CAT) principles but without realising that the “cat might be out of the bag”. – Oct 18, 2023


Former deputy chief minister II of Penang and ex-Perai state assemblyman Prof Ramasamy Palanissamy was also a former Penang Development Corporation (PDC) board member.

The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.

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