Thursday, November 09, 2006

This Is Criminal Breach Of Trust!

The Summit shopping complex is managed by a Meda-owned company called Meda Complex Management Sdn Bhd. Meda Complex Management Sdn Bhd (MCM) is in a major legal battle with the tenants & shop owners in the complex. MCM is suing the tenants and shop owners for not paying for utilities and other fees for many years. The tenants and shop owners then formed an association to challenge MCM for mismanagement and failure to deliver on their promises. The amount involved is close to RM1 million.

Besides mismanagement and failure to promote, one of the major complaints against MCM was that MCM created so many little stalls in the open spaces to fill up the lower 2 levels to increase their revenue. But these little stalls turned the shopping complex into an indoor pasar malam, and ate into the business of the shopowners and their tenants. Business for the shopowners and tenants were already bad since it opened. The little stalls made it worse. At the same time MCM did little to attract customers to the complex. Frequent robberies, snatch thieves and cars stolen in the car parks created a very bad name for the place.

There was a major restructuring in MCM recently. It could be because they were prepared to lose the legal case.

The Meda Inc owners created 2 new supply companies to provide services to MCM. One was called "Superforce Security". The other one is a labour contracting company.

Superforce Secuirty was to be headed by MCM's former general manager & director Mr Kong.

The plan was for Superforce and the labour company to provide services to MCM at grossly inflated prices so that big profits will be retained at these two private companies while MCM is left to become financially crippled. For example, XXX Security offer their services to Superforce at RM5 an hour. Superforce will quote MCM the same service at RM12 an hour. False quotations will be submitted to MCM to create the illusion of an open tender. No other company will have a chance of getting the deal except through Superforce. The labour supply company provides all sorts of cleaners, guards, etc for Superforce and MCM. This scheme applies to all other properties owned and managed by Meda.

With this scheme, the Meda owners are able to bleed the main company that are supported by public funds. The losers are the public shareholders and suppliers. The winners are the owners as they pocket the profits on the side. Many of the shareholders and directors of these subsidiary companies are actually proxys for the Meda owners. Meda Inc is a Bursa company with a web of smaller subsidiaries, whose shareholders and directors (mostly) are merely lending their names to the owners. Even the chauffeur of the owner has his name in some of the companies. Many of these companies are not officially listed as Meda Inc subsidiaries. This is how they suck out the money into the Meda owners' pockets. That is how suppliers and contractors are cheated.

This scheme applies to all other properties owned and managed by Meda, such as Summit Bukit Mertajam (under another Meda company ZKP), South City Plaza (owned by Kumpulan Emas* but they are the same people) etc. A lot of RM to siphon out into their pockets.

If the association of shopowners and tenants in Summit complex win the law suit against MCM, MCM may claim that they have no money to pay damages. MCM also owes a lot of money to other suppliers and contractors. They owed almost RM1 million to TNB. Recently they had to pull funds from the other companies in the group to pay the bill when the TNB technicians went to the complex and threatened to cut off the electricity.

It seems to me that the owners are deliberately getting their main companies into heavy debt, but they are making million-ringgit profits on the side. As Group Managing Directors and holding directorships in so many companies within the group, they are still receiving their multiple fat paychecks every month.

It is sickening to see these type of fraudulent acts and criminal breach of trust committed by these unscrupulous people.

If Pak Lah is serious about cleaning up corruption, he should start dealing with corporate malpractices, corporate fraud and corporate CBT first. This will start a culture change. It is good for our country. It's probably easier than dealing with his UMNO colleagues. Malaysia Boleh.

(Footnote: The Summit complex has now removed all the little stalls and booths to make the place look better. According to my sources, this was part of their scheme to attract a new anchor tenant because Fajar has moved out in December last year. Early this year, the owners tried to spruce up the place so that they can fetch a higher price for their property as they wanted to sell it off to potential investors. But they want to retain management of the complex through MCM. As you can see, it's very profitable to be a "management company" for your property. But as far as I know, they could not convince anyone to buy it at their asking price. I heard that even EPF was considering buying it. But the deal fell through. Maybe the amount of kickback the owners offered was not enough for the officials to blind them to the low property valuation.)

[*Kumpulan Emas lost so much money that small shareholders forced the chairman Dato' Patrick Teoh who is Meda Inc Group MD Kenneth Teoh's eldest brother, to give up his chairman post and become vice-chairman. He is replaced by Dato' Hii of SEGi. But they are all part of the whole gang of companies. (I am not saying Datuk Hii is like them. I have not heard anything about Dato' Hii, who is doing a good job with SEGi)].

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