She also said that neither she nor PKA was aware of a directive from the Treasury stating that they have to go back to the Treasury before approving any expenses or contracts worth more than RM100 million.

Also, the ex-general manager flatly denied getting any instructions from the finance ministry (MoF) that the government-backed bonds be raised by PKA and not through KDSB to raise funds as it would be cheaper.

To a question if she knew that government borrowing is much cheaper than the private sector borrowing, she replied: “I didn’t have to think about that.”

In her testimony to the Public Accounts Committee (PAC), Phang, who is the central figure in the PKFZ project, said that she only knew about the letters of support after receiving a letter from the chief secretary to the government (KSN) asking her to investigate the three letters of support that were issued by the then Transport Minister Tan Sri Chan Kong Choy.

The letters of support were to assure investors that the ministry would ensure the PKA meet its obligations to bonds issued to raise funds for the project.

In her four-hour testimony to the PAC, Phang also said that she knew nothing of the first letter of guarantee issued by Tun Dr Ling Liong Sik — also to raise funds — to support the purchase of the 1,000 acres of land where the project is located.

The land was purchased from Kuala Dimensi Sdn Bhd (KDSB), a company linked to Barisan Nasional Backbenchers Club chairman Datuk Seri Tiong King Sing.

 KDSB also was given the job to develop the entire 1,000 acres.

“We submitted a report back to KSN that none of us (PKA) were involved in it (the issuance of letters),” she had testified, according to the PAC report that was made public yesterday.

On the directive from the Treasury pertaining to expenses of more than RM100 million, Phang said that it was something that she was not aware of nor was she alerted to, even by Treasury officials who sit on the board of PKA.

To a question from PAC chairman Datuk Seri Azmi Khalid, Phang said that no one from MoT or MoF alerted her to the Treasury’s directive.

This article appeared in The Edge Financial Daily, November 5, 2009.