PKA case: Lee says Pak Lah approved proposals initiated by former GM (Updated)

SHAH ALAM: Former Port Klang Authority (PKA) chairman Datuk Lee Hwa Beng told the High Court that then Prime Minister Tun Abdullah Ahmad Badawi had approved a proposal initiated by former PKA general manager Datin Paduka O. C. Phang without consulting the company's board members.
The proposal, he said was on the request by Kuala Dimensi Sdn Bhd (KDSB) to increase chargeable interest from 5% to 7.5% per annum for additional development works (ADW) for PKA.
"Prior to the execution of ADW on Feb 24, 2006, Phang issued a letter to then Transport Minister Tan Sri Chan Kong Choy seeking his instructions in relation to KDSB's request.
"The letter stated that PKA members were of the view that KDSB's request was reasonable and could be accepted," he told Judicial Commissioner M. Gunalan at the High Court, here, today.
Lee said following a letter by Chan to Abdullah on March 28, 2006 seeking approval to the proposal, it was approved the next day.
He further testified that Phang mislead Chan when she wrote the letter as the said request by KDSB had not even been presented to the PKA board members for consideration and approval.
The move, he said cost PKA an additional liability of RM49.367 million and was not made in the best interest of the company.
"Phang ought to have known at the material time that PKA was not in the position to self-finance the project as highlighted by the Auditor-General in his various reports, the earliest dated on May 27, 2004," he added.
The breach was among 15 breaches of fiduciary duties allegedly committed by Phang when helming the Port Klang Free Zone (PKFZ) project.
On Wednesday, PKA lawyer Lim Chee Wee in his opening statement claimed Phang was responsible for eight key agreements between PKA and KDSB but failed to refer any of them to the Board members for their deliberation and approval, prior to their execution.
PKA is suing Phang for alleged criminal breach of trust and breach of fiduciary duties leading to a sudden rise in costs from RM1 billion to RM7.453 billion for the purchase of the land (from Kuala Dimensi Sdn Bhd).
Phang is represented by lawyer Matthew Thomas Philip.
The trial will resume on March 15, next year.