Selangor Menteri Besar Tan Sri Abdul Khalid Ibrahim said Thursday the termination of the contracts of 22 staff of Perbadanan Kemajuan Negeri Selangor Holdings Sdn Bhd (PHSB) was based on the integrity pact implemented in the PKNS company in compliance with good corporate governance.

Abdul Khalid, who is the PKNS chairman, said it was found that there was no necessity to prolong the services of the staff because the permanent staff at PKNS already had similar expertise and experience.

"We found that there was an overlap of duties between the freshly recruited staff and the old employees as they were performing similar tasks.

"There were also complaints from whistle blowers that some of the contract officers were not appointed through open advertisements but with the recommendation of members of the PKNS board of directors.

"This resulted in the stifling of avenues for promotion of the permanent staff in PKNS," he told a news conference at the State Secretariat building, here.

Last Tuesday, PHSB, a subsidiary of PKNS, reportedly terminated the contracts of 22 of its staff, allegedly without any valid reason, with 24-hour notice effective from the previous day.

The letters of contract termination were signed by PHSB chairman Datin Paduka Norazlina Zakaria.

Abdul Khalid claimed that the termination of contracts of the 22 staff enabled the PKNS to save RM7 million in operating expenditure annually.

Meanwhile, the menteri besar also instructed the new PKNS general manager, Azlan Alfiah, to conduct a thorough study on the PKNS organisation, including the human resource aspect.

"Azlan had submitted a management turnaround strategy report in which he has proposed that PKNS immediately implement a reorganisation," he said.