DAP, PAS question Tabung Haji’s ‘high-risk’ land deal with 1MDB
(Malay Mail Online) – DAP and PAS leaders questioned today Lembaga Tabung Haji’s (LTH) plan to buy two plots of land from 1 Malaysia Development Berhad (1MDB) for over RM700 million, up to 65 times higher than the price the state investment arm had purchased it at.
DAP’s Bukit Bendera MP Zairil Khir Johari pointed out that the internal LTH risk management team had reportedly said the Muslim pilgrim fund board’s reported plan to purchase two plots of land totalling five acres in the Tun Razak Exchange (TRX) was “high-risk”, due to the softening property market, property oversupply, and the slow pace of development in the real estate project planned as a financial centre in the capital.
“With the above ‘high-risk’ scenario, it is extremely questionable whether LTH would be able to recoup its projected total investment of RM3.2 billion, inclusive of RM772 million for the land and RM2.4 billion for development costs,” Zairil said in a statement.
“Coupled with 1MDB Bandar Malaysia’s RM1.6 billion sukuk programme, the risk report noted that LTH’s total exposure in 1MDB would come up to RM4.8 billion, which was felt to be ‘quite substantial for a single entity investment’,” added the DAP assistant national publicity secretary.
International news wire Reuters reported today that the debt-laden 1MDB is set to sell two plots of land in the TRX project to Tabung Haji for about RM700 million, quoting anonymous sources.
Zairil said Tabung Haji’s reported plans to buy the land from 1MDB, which is RM42 billion in debt, amounted to a bailout of the troubled company and called on LTH chairman Datuk Abdul Azeez Abdul Rahim to verify the claims.
“If all that has been said is true, then both Datuk Azeez and the minister in charge of LTH, Datuk Seri Jamil Khir Baharom, should resign their positions immediately, as this desperate bailout attempt is nothing less than a despicable betrayal of the trust of Malaysian Muslim pilgrims,” he said.
The Benchmark blog put up Tuesday several copies of what it claimed was internal documents showing LTH’s plan to buy the TRX land from 1MDB for RM772 million.
The blog claimed that the two plots of land will be sold to LTH for RM2,860 per sq ft (RM194 million in total) and RM3,900 per sq ft (RM578 million in total) respectively, when 1MDB had bought the land from the government at RM60 per sq ft, 48 to 65 times more expensive.
PAS vice-president Husam Musa called on Prime Minister Datuk Seri Najib Razak as 1MDB chairman to explain the issue.
“The question is — is Tabung Haji’s investment in 1MDB Tabung Haji’s core investment? Are Tabung Haji depositors set to become victims of 1MDB in this high-risk investment?” Husam asked in a statement.
