Dealings with underworld Pt4

Case 2 :

There is this job in Ipoh, people's housing project, the government awarded the main contractor Rm25mil and they want ot sub it out for RM19mil. We worked out the math and thinks it is still worth while, subjected that he payment form the client is prompt.

Problem is we got to know about this project through a middle man, or rather a company. The middle company is a state government link company, which initially led us to believe we were getting the job from them. (Yes, state government link company become a subcontracting company, seeking rent for doing nothing) They told us they got the job for RM20mil and are willing to sub it out to us for Rm19mil.

We had meetings after meetings, karaokes after karaokes with the MD of the GLC to get the job. It wasn't until the very last minute we realise we end up the 3rd tier subcon for the job. (Another lesson learnt, always check the background of the company you are dealing with and verify their claims. We had taken for granted in this case by thinking nothing will go wrong with a state GLC.)

By this time Gan has ganged up with one of the labour subcon for us and basically asked us to take them to perform the job. As the labour subcon was doing a decent job, I did not realise the politics and undertable dealings that was going on until it was too late.

We cleared the site and put up the temporary fence and put in the first progress claim. The money was not forthcoming and we were worried.

Oh! Before that did I forget to tell you that we paid RM150k upfront to secure the job? YUP, RM150k.

Anyway, needless to say, we had to slow down the job and make a scene when the govt officials were visiting the site. Gan came up with an idea and asked our subbie to ferry 50 foreign construction workers to the Main contractor's office to make a scene. He told me to act as if I did not know what had happened for my " plausible deniability"! I was out of wits at that time and allowed him to drag me through the mud.

The main con got pissed and we sat down for a showdown. We worked out the sum and demanded compensation. This part is hazy, can't remember what actually happened but we were kicked out of the job, and we did not get the money. I think they ask us to sue them. (later of course I realised that Gan had played his hand again by getting the subcon to strike a deal direct with the main con to continue working there.)

After that we had again many rounds of meetings, threathenings and finally we manage to retrieve the Rm150k plus some claims from the parent company of the state GLC we were dealing with. (The credit goes to my lawyer partner, made me realise this should work as they should, no underworld should be part of a legitimate company)

Reading back I have not give justice to the whole story, the whole story actually spans over a period of 2 years with multiple meetings and negotiations and threats, travelling & karaokes etc. Definitely much more exciting than what I have tried to describe here.

Dealings with the underworld Pt3

Case 1 : (not in porper order)

We manage to bag a RM60mil job subcontracted from a public listed company. The project was to build a few apartments for the army in an army camp. Margin was low but we still took it as we thought it will be good for the cashflow and also as a good opportunity to turn the tables around.

I managed to secure some financing from a few Towkahs I know and off we go.(Getting poeple onboard without fundamental understanding of the project proved to be another disaster inthe making for both parties. POst mortem note)

The project went well the first few months. Things went south when Chinese New YEAR was coming and subcontractors and suppliers are expecting a full payment, the pressure was intense.

The progress claim we put in to the client for Chinese New Year payment was around RM800k, we received RM200k, just enough to pay off the workers but nothing left for the suppliers.

People were camped outside my office waiting for payment. I have to scarmble for money and request more from investors, which of course they were not happy.

Gan just came into the picture not too long and he asked for a meeting with the client's MD. From what I heard he really bullied the poor guy like what he did to me and the guy came out with another RM200k.

I was sooo happy when I say the check and really thought I have finally met the guy who will save the company from falling apart! Needless to say things isn't always as it seems, or else I will not be writing this story.

We cashed te check and just made it through Chinese New Year. I was not a pleasant CNY for me that year, 2003 if not mistaken. I have to make hard decisions while worried about suppliers coming to my parents house during CNY for payment. (Another lesson learnt : the photocopied IC you submit when you sign up for your credit line with suppliers, thats the time it matters)

Finally we stopped the job after CNY demanding the client to relook into our contract rates to prevent the same issue from happening again. The client pretended to negotiate with me while at the back was secrectly meeting our 3 subcontractors to offer them to take up the job themselves. I found out when one of the subbies came to me, in view of our situation, we finally agreed not to pursue the issue anymore and walked off the project lest stuck in it with a bigger hole. (FYI the company is not PN17 in Bursa Malaysia)

Gan did his magic again and got us final settlement to close out the account, it was much lower than what we have committed but we did not have the will to pursue it legally.

So where is the catch. I ddi not realise the catch until much later, probably 1 year later when we were winding up the company. My investor who once thought I was his golden child become one of them on the other side, demanding repayment for his failed investment (luckily I kept him in the loop for all the dealings, which he had nothing much to complaint about as I consulted him on every major decision before we acted) was comparing books with me. He was accusing me of hiding RM300k from him from a payment from the army camp project client.

Apparently he went to the client and demanded for a set of accoutns before meeting up with me. I of course denied but deep down I knew I was screwed by Gan, he must have asked for the client to issue 2 cash checks and received it on behalf of the company.

That of course did not end well with my investor, Tan. (He never really believed my story) And that, is another story to learn how to pick your partner.