The Penang Development Corporation (PDC), the state development agency, asserted that it was UDA Holdings Bhd (UDA) that brought in Q Islands Development Sdn Bhd (Q Island) to pursue a buyout offer on PDC’s stake in Tropical Island Resort Sdn Bhd (TIRSB) for RM156 million.
Penang Chief Minister Lim Guan Eng said as UDA was the effective owner of TIRSB, with 51 per cent majority control, PDC could not do anything without UDA’s consent.
“Unlike PDC, UDA can sell its shares without PDC’s consent. It is ridiculous for BN (Barisan Nasional) and Gerakan to claim that PDC can dictate terms to UDA with only 49% control,” Lim, who is also PDC chairman, said in a statement, here today.
Yesterday, Penang Gerakan questioned the Penang government’s decision to sell PDC’s 49 per cent shares in TIRSB to Q Island, a subsidiary of Ideal Property Development Sdn Bhd (Ideal).
State Gerakan chairman Teng Chang Yeow said allegations that the PDC had accepted UDA Holdings Bhd’s (UDA) offer to sell its stake in TIRSB to Ideal was not true.
PDC, in a statement issued on Friday, said the state development agency had accepted an offer by UDA to sell its stake in TIRSB to Ideal for RM156 million.
PDC general manager Rosli Jaafar said UDA had brought in Ideal to jointly develop their project and also buy out PDC’s 49 per cent stake in accordance with PDC’s conditions.
TIRSB, a joint venture between UDA and PDC, which holds 51 per cent and 49 per cent stake, respectively, was appointed by Bestari Hospitality Management to operate the resort in Pulau Jerejak in 2004.
Last Thursday, Penang Gerakan questioned the state government’s plans on the enormous future development on Pulau Jerejak.
The chief minister said TIRSB had incurred losses of RM40 million as at end of 2015, and was no longer financially viable and therefore, PDC agreed to the sale of 49% stake in TIRSB.
Lim said the state government took eight years to determine measures to protect the rights of Penang residents over Pulau Jerejak before finally securing the transaction that was fair and favourable.
With the deal, he said the state government would recoup RM4.4 million in loans and RM15.44 million investment by selling its stake for RM156 million.
“We also disposed of our 49% stake in a loss-making company, TIRSB, with RM40 million losses, to secure a profit of RM140.6 million that is nearly 10 times over the initial investment,” he said.