Bank Negara land deal, unanswered questions

A year ago, it was announced that Bank Negara had purchased 55.79 acres of land in Kuala Lumpur for RM2.066 billion from the federal government. 

Twelve months on, the deal remains a puzzler. 

The Edge reports that contiguous to the Sasana Kijang complex and near the Asia School of Business as well as the Financial Industry Training Centre that was under construction, Bank Negara maintained that the land was for the development of a financial education hub.

Known as Lot 41, the land was also to be the new home of The Global University of Islamic Finance and the International Shari’ah Research Academy for Islamic Finance. 

The size of 37 football fields, RM850 psf was paid for the 2,430,212 sq ft tract. Though close to the market price for commercial land in the vicinity, property experts questioned the amount spent, when the alternative of leasing land could have been done for a nominal sum instead.

DEfending the purchase, Bank Negara said that independent valuation had been undertaken, by a firm agreed to by both the vendor and the purchaser. 

As it is not intended for commercial profit, valuers asked why there was a need to pay such a high price.

The Bank Negara governor Tan Sri Muhammad Ibrahim justified the purchase as transacted at arms length, and that the central bank wanted to purchase it, and it was not that the then Barisan Nasional government wanted to dispose of the tract.

The publication, in searching the Federal Territories Kuala Lumpur Lands and Mines Office reveals that the title status of Lot 41 was freehold, and originally registered to the Federal Lands Commissioner (FLC). On Dec 14, 2017 the title was transferred to Hartanah Mampan Sdn Bhd, which then effected transfer to Bank Negara 15 days later on Dec 29. 

Wholly owned by Actius Terra Global Holdings Sdn Bhd, which is in turn held by the Minister of Finance Inc. 

In the past, the norm had been direct land transfers from the FLC to the purchasing company. 

And was the Jan 4 land purchase deal time to appear after the last day of deputy governor Dr Sukudhew (Sukhdave) Singh who was retiring early?

The timing of the deal also coincided with the 1MDB obligation due to Abu Dhabi state fund International Petroleum Investment Co. Finance Minister Lim Guan Eng has since confirmed that the payments included proceeds from Bank Negara.

Muhammad pointed out that the central bank did not have any control over how the proceeds would be used, and subsequently resigned in June “in the interest of protecting Bank Negara’s reputation”. 

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A few months ago, it was announced that an independent party had been commissioned in August, to review the land purchase, and that to facilitate review, relevant officers of Bank Negara had opted to take leave of absence. 

The Malaysian Anti-Corruption Commission has questioned Muhammad on the purchase, reportedly in order to ascertain if the purchase was in accordance with property procedures. 

Questions remain. 

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