KUALA LUMPUR: The Public Accounts Committee (PAC) has called for the leasehold status of the land where St Regis Langkawi is located to be immediately resolved.
Its chairman Datuk Seri Mas Emieryati Samsudin said the Finance Ministry (MoF) should be more proactive in resolving the issue which arose from the Langkawi Development Authority's (Lada) management on the property in Langkawi.
She also said the unresolved status had also delayed the completion of the lease agreement as the initial shareholders' agreement stipulated that the acquired land must have freehold status.
"Following the unsigned agreement, Lada was unable to collect a tax value worth RM660,000 per year for the period of four years and 10 months.
"The total tax value, meanwhile, amounted to RM3.19 million," she said in a statement, today.
The PAC today tabled its report on the Langkawi Property Development Management under Lada and MoF after questioning several witnesses on Nov 30 and Dec 13, last year.
This comes after the revelation of the 2022 Auditor General's Report on Lada's failure to collect land lease revenue for two projects, which are St. Regis and Tok Senik Village project.
The witnesses included the Treasury secretary-general Datuk Johan Mahmood Merican, deputy secretary-general (Investment) Datuk Dr. Shahrazat Ahmad, and Lada deputy chief executive officer Wan Kamarul Faisal Wan Kamardi.
Meanwhile, Mas Emieryati said PAC also discovered that Lada, the Minister of Finance (Inc) and an Indonesian company called Rajawali Group have joint shares in INR Sdn Bhd, which is the hotel's operator.
"Surprisingly, we found out that Lada owns 30 per cent, MoF Inc (30 per cent) and Rajawali (40 per cent), making MoF the major shareholder with a 60 per cent shares."
She also said MOF planned to initiate the sale process of the hotel to settle INR's debt to the development bank, but there were difficulties in finding potential buyers while the land status was unresolved.
"INR's inability to settle loan installments to the bank for 24 months has led to it becoming a non-performing loan.
"It became more critical when the country was hit by the Covid-19 pandemic. As of June 30, 2021, the outstanding amount is RM27 million," she said.
At the same time, she also recommended Lada to improve its project management expertise to ensure that ongoing projects are completed within the timeline, quality and return on investment as targeted.