By Tony Pua, MP for Petaling Jaya Utara

Yesterday, Terengganu Menteri Besar Ahmad Razif Abdul Rahman called the claims of Mr Li Yang, the major shareholder and executive director of CAA Resources on the latter’s involvement in Bukit Besi mines as “blatant lies”. CAA Resources Limited is a mining company recently listed on the Hong Kong Stock Exchange in July 2013.

Mr Li has attracted controversy with his statements made to the New York Times which reported that he had paid for each of the ruling party politicians with indirect stakes in the mine to receive the royally granted title of “Datuk”. Mr Li has said that it costs about $100,000 to arrange each royal grant. He also called this a “common practice” in Malaysia.

Ahmad Razif said that “the state government had never authorised this company, CAA Resources, to mine in Bukit Besi, whether directly or through a different company… The company has not dealt with any government department on the matter, whether the Land and Mines Office or the Terengganu Heritage Fund Board, which has been tasked with the duty of managing the former Bukit Besi mines.”

The Terengganu Menteri Besar should not be so quick to dismiss the New York Times report or Mr Li’s claims.

In a disclosure with the Hong Kong Stock Exchange on 3rd October 2013, CAA Resources reported that its wholly-owned subsidiary, Capture Bukit Besi Sdn Bhd entered into a binding Memorandum of Understanding (MOU) to acquire 60% interest in Red Sun Resources Sdn Bhd its existing shareholders, Mr Lin Siew Wan and Mr Ng Chon Aik. The company owns parcels of land located at or surrounding Bukit Besi in the district of Dungun, Terengganu.

In the agreement, Capture Bukit Besi agreed to conduct the exploration and/or prospecting activities at Bukit Besi at a cost not exceeding US$5 million. The company also agreed to repair roads, build dam(s) and construct pond(s) at Bukit Besi at a cost not exceeding US$6 million.

In return, Mr Ng “shall procure the Approvals from the relevant authorities to be issued to the [Red Sun Resources] for the purpose of undertaking the Project”.

The announcement further stated that in consideration of Mr Ng procuring the Approvals, the Purchaser agrees to pay to Mr Ng or such other party as may be instructed by Mr. Ng the sum of US$10,000,000 to enable Mr. Ng to procure the Approvals. The sum however, will be refunded if Mr Ng fails to obtain the Approvals within a prescribed period.

Based on CAA Resources’ financial statements as at 31 December 2013, the company has already spent US$15.1 million on the above transaction.

Unless CAA Resources is lying to the Hong Kong Stock Exchange and its investors, the above documents clearly showed that the company’s involvement in mining Bukit Besi is real.

Datuk Ahmad Razif should perhaps conduct a more detailed due diligence with his officers first before issuing such immediate denials and accusations of “lies”.

More importantly, given the above information, the Menteri Besar must immediately withdraw all permits and approvals granted to Red Sun Resources or its associated companies to protect the reputation and integrity of the Government.

Terengganu and Malaysia must demonstrate that it is not an “available-for-sale” banana republic, and prove that it does not welcome corrupt businessmen into the country.