KUALA LUMPUR – The due diligence on Umech Construction Sdn Bhd’s development proposal is continuous, said Penang Chief Minister Chow Kon Yeow amid criticism from former deputy chief minister P. Ramasamy and Datuk Seri Lee Kah Choon.
Chow said a special subcommittee meeting on November 28, 2022, was conducted after the Penang Development Corp (PDC) instructed Umech to present the development concept to the board in detail.
“The meeting and presentation by Umech are part of the ‘due diligence’ by the PDC, in line with the decision of the board meeting,” he said in a statement today.
“The due diligence was carried out continuously, where based on the comments decided in the subcommittee meeting, PDC also carried out an official search of the company’s registration, profile, and experience.
“Umech had to submit supporting letters of credit from a financial institution as proof of the company’s financial strength.”
The special meeting was chaired by Chow, and was attended by former deputy chief ministers Ramasamy and Datuk Ahmad Zakiyuddin Abdul Rahman, as well as then trade, industry, and entrepreneurial development executive councillor Abdul Halim Hussain, and Lee – a director of PDC and Invest Penang Bhd.
Chow also confirmed that Lee resigned on October 2 as his special investment advisor with a one-month notice. He also resigned from the InvestPenang board.
Following the meeting, the chief minister said Umech was required to conduct market studies and review the proposed land use composition so that it does not compete with PDC development areas.
The company was also instructed to obtain input from InvestPenang and the Malaysian Investment Development Authority on the matter, while also detailing the status of its financial resources to PDC – similar to Ramasamy and Lee’s claim.
In return, the PDC must be clear about the planned development’s main role, and finalise other conditions of the development cooperation.
Chow said the board of directors obtained the latest information continuously – on August 19, October 28, and December 8, 2022, as well as February 9 and April 11, 2023 – to discuss and obtain the latest status of the projects.
He added that all information identified was brought to the PDC board meeting on February 9, which approved in principle the sale of land as a joint venture with Umech, with conditions presented in the same meeting.
Today, Ramasamy and Lee in a joint statement denied the existence of a due diligence meeting evaluating PDC’s land deal with Umech, adding that Chow’s statement was “misleading, unfair, and causes harm to our professional reputation”.
They also claimed the meeting on November 28 was not to evaluate whether Umech was suitable to be awarded a contract, but was for the company to furnish details about its proposed development. – October 9, 2023