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UEM, Khazanah mum on Qatar troubles

Posted in Uncategorized by malaysiasms on June 11, 2009
THE MALAYSIAN INSIDER
By Lee Wei Lian

KUALA LUMPUR, June 11 — A lawsuit to the tune of hundreds of millions of ringgit has been filed against UEM Group Bhd by the government of Qatar over a dispute regarding a highway project in the Middle Eastern country.

However, UEM and its parent company, the government-owned investment agency Khazanah Nasional Bhd, have decided not to comment publicly for the moment.

One Internet website alleges that there was an attempt to cover up UEM’s legal problems in the Gulf state. The website also states that UEM’s operations and bank accounts in Qatar have been frozen and that the Qatar government is going to issue a warrant of arrest for former UEM managing director Datuk Ridza Abdoh.

When contacted, a Khazanah spokesperson said that the company does not respond to “speculation”.

UEM also declined to comment.

“UEM Group is not in the position to comment on the matter as we respect the Qatari legal system. We will not make any statements that may jeopardise our legal position,” said UEM’s director of group corporate relations and communications Basariah Abdul Latiff.

Group chairman Tan Sri Ahmad Tajuddin Ali however was reported yesterday as saying: “We are just the contractor. It is the consultant that has been sued but we are named as second defendant.

“We will manage the case. We have strong case to defend ourselves,” when asked about the lawsuit after the company’s annual general meeting.

According to the blog, which some consider a right-wing socio-political website, UEM and two other companies involved in the project in question, Parsons International Ltd and Qatar Insurance Company, are being sued for Qatari riyal (QR) 876,318,972 (about RM840,981,000) for failing to fulfil contractual obligations related to the construction of Salwa road in the Qatari capital of Doha.

The blog further claims that a further QR400 million is expected to be levied on UEM for the cost to complete the road the project which was started in 2001 and that the UEM Group and UEM World were delisted in order to cover up the potential financial losses.

Citing sources, the blog author also claims that Datuk Izzaddin Idris, the newly appointed CEO of UEM Group, may reconsider the job due to the “revelation” of the lawsuit.

Sources in Khazanah however contend that Izzaddin was aware of the issues in Qatar when he accepted the job and that UEM Group has not been listed in the first place.

According to news reports last year, UEM World was delisted and its property arm UEM Land was listed instead to give investors direct participation in the latter which has become the main driver of the share price of UEM World due to its projects in Iskandar Malaysia.

The Salwa road is one of the main shopping thoroughfares in Doha. The design was done by Parsons while construction was by UEM.

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