Thursday, March 29, 2007


ZKP Development Sdn Bhd is bankrupt.

This news just came in from another reader through the email.

ZKP Development Sdn Bhd is under receivership. It is bankrupt, unable to pay its mountain of debts to its suppliers, contractors and other creditors.
Meda Inc Bhd owns ZKP, and ZKP owns the Summit shopping and hotel complex in Bukit Mertajam.

Auditors have been busy in the offices there. Staff have been leaving in numbers. Management staff of the Bukit Mertajam hotel are also trying to get out as fast as possible.

That's bad news for the suppliers and contractors. They have a huge amount of bills waiting to be paid. Will the owners sell the property and use the proceeds of the sale to pay off its creditors? Frankly, I doubt it. People in the business circle familiar with Meda Inc Bhd say the Teoh brothers are "dirty" people well known for their twist and turn and underhand methods.
Maybe Meda Inc Bhd already made sure that all the cash and assets of ZKP are moved out of the subsidiary first, and after that, deliberately let ZKP become insolvent so that ZKP don't have to pay the creditors? The suppliers and creditors will be the ones who suffer while the Teoh brothers' bank accounts fill up with another ten or twenty million ringgit. Who knows? This is the legal way to rob their suppliers' money.

Long ago around 1998, when the complex was just completed, Meda Bina Sdn Bhd (MBSB) and Meda Property Services Sdn Bhd (MPSB) - both Meda Inc Bhd's fully-owned subsidiaries- were dragged into a lawsuit by their contractor Tap Construction Sdn Bhd. Typical of the Meda Inc Bhd Teoh brothers, they didn't want to pay the contractor, which resulted in a long court case that eventually ended with the Meda Inc Bhd companies ordered to pay Tap Construction RM 36 million to settle. But not surprise, Meda Inc Bhd companies claimed not to have the cash to pay, so Tapcon agreed to have the Bukit Mertajam property transferred to ZKP, and the amount owed to Tapcon probably converted to shares or paid in instalments (I cannot confirm this part but I think that's how they did the deal.) Eventually, ZKP became 100% fully owned by Meda Inc Bhd.

Last year, ZKP sued its anchor tenant The Store, but lost. ZKP was ordered to pay legal costs for The Store. ZKP then fought AMAsurance Bhd for RM 6 million in another dispute, but its case was thrown out of court.

Instead of embarrassing themselves in court time and time again, Meda Inc Bhd owners - Kenneth Teoh, Teoh Seng Aun, Dato Patrick Teoh - should have just saved their lawyers' fees and pay their suppliers instead. This would have created much goodwill for them, rather than be cursed by so many people - cursed by their suppliers, their bankers, their tenants, their customers, their minority shareholders and even their own staff!

Another court case involving a Meda company and directors

This month, another subsidiary Meda Development Sdn Bhd and some directors will face legal action in court from Companion Park Sdn Bhd for owing money amounting to RM3.5 million.
I am sure Meda Inc Bhd's lawyers really love this customer because it gave the lawyers so much business. As you can see, all those lawsuits did not end in favour of ZKP/Meda Inc Bhd. I'm sure it's not the lawyer's idea to fight or sue when Meda Inc Bhd has no grounds, although it makes the lawyer richer. These are just dirty tactics by the Teoh brothers to force its suppliers and contractors to agree to accept less than the outstanding sum. But they can't bully everybody.

If you have any more information, please send to me. Wendy truly appreciate all your support.

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