‘1MDB only holds 20% of Air Itam land purchased’

GEORGE TOWN: Government strategic fund 1Malaysia Development Bhd (1MDB) only holds 20% or 23.47 acres (9.5ha) of the 116.89 acres of freehold land it purchased in Air Itam in 2013, revealed Chief Minister Lim Guan Eng last Friday.

He also revealed that the state could not locate on state records the remaining 117.11 acres of the total 234 acres of land which 1MDB claimed to have purchased in Penang.

“We searched everywhere in the Land and Mines Office records but could not find the remaining acreage (117.11 acres). All we found were 116.89 acres. And from that, we learnt that 1MDB only owns 20% or 23.47 acres in the state. It is shocking that 1MDB bought the three pieces of land with a high price of RM1.08 billion.

“Our checks showed that 1MDB only holds one quarter or 15.09 acres on Grant No 43187 (Lot 1561), one quarter or 3.87 acres on Grant No 53264 (Lot 1584), and 4.51 acres on Grant No 4661 (Lot 1457).

“All the land titles were transferred to 1MDB’s property unit 1MDB Real Estate (Ayer Itam) Sdn Bhd (1MDBRE) on March 6, 2014. It is very shocking that only 23.47 acres of the three plots of land belong to them. Why buy land if you do not get to own it 100%?” he said when presenting his wrap-up speech for Budget 2016 last Friday.

He added that it did not make sense that the 116.89 acres was bought for RM1.08 billion, which he deemed exorbitant, particularly when the stake held was less than 100%.

According to further information provided by Guan Eng in a press conference on Saturday, Lot 1584 is also owned (in varying acreages) by individuals Chong Sie Cheong, Ng Peng Wah and Tan Jiak Chye, and companies Choong Lye Hock Estates Sdn Bhd and Gerak Indera Sdn Bhd.

The same individuals and companies as well as Farlim Properties Sdn Bhd also share ownership with 1MDBRE on Lot 1457, the records showed.

On Dec 23 last year, 1MDB chairman Tan Sri Lodin Wok Kamaruddin said the amount paid by the Finance Ministry Inc’s wholly-owned entity for the Air Itam land was not only “commensurate” with its value but highly attractive.

“Given the general difficulty companies face in finding sizeable plots of land in prime areas of Penang that are suitable for carrying out large-tier development projects, the amount paid by 1MDB for this land was not only commensurate with its value but highly attractive,” Lodin said then.

Meanwhile, Guan Eng said the state had invited 1MDB president and group chief executive officer Arul Kanda Kandasamy to clarify the land purchase but the latter failed to show up.

“We want clarification on why 1MDB bought land without 100% equity. Would RM1.08 billion float away just like that?” he said, adding that the July 13, 2015, letter was issued by the state’s Land and Mines Office to Arul Kanda.

Guan Eng said on July 23, the deputy land and mines director contacted Arul Kanda to give more details about the meeting but no official response was received.

“Instead he verbally said he would come forth but there has been no follow-up since,” he added.

On Sept 20 last year, The Edge weekly revealed that the debt-ridden 1MDB engaged in land deals with two groups of vendors which included acquisition of undivided shares in plots of land.

Days before the 13th general election, Prime Minister Datuk Seri Najib Razak announced that the federal government would build 9,999 units of low-cost and low-medium housing in Air Itam.