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KUALA LUMPUR, May 8 — Lembaga Tabung Haji’s (LTH) purchase of a plot of land from 1Malaysia Development Bhd (1MDB) for RM188.5 million that the pilgrimage fund claimed was a discounted price is still exorbitant as it is 43 times higher than what 1MDB had bought it for, a DAP lawmaker said today.
DAP’s Bukit Bendera MP Zairil Khir Johari pointed out that LTH received a discount of less than three per cent by buying the land at RM188.5 million, or RM2,773 per sq ft, as the original recommended purchase price for the 1.56-acre land was only slightly higher at RM194 million.
“Nonetheless, it must be noted that RM2,773 psf is still a very high price for LTH to pay considering 1MDB bought the land for a mere RM64 four years ago in 2011,” Zairil said in a statement.
“In fact, LTH’s own internal risk assessment report revealed that comparable transactions in the vicinity saw land being sold for between RM649.49 psf to RM2,266.85 psf,” the DAP assistant national publicity secretary added.
Quoting sources with direct knowledge on the matter, Reuters reported yesterday that 1MDB was set to sell two plots of land in the Tun Razak Exchange (TRX) project to the pilgrimage fund for about RM700 million.
LTH, however, refuted reports that it had bought two plots of land from the debt-laden state investment arm, saying that a purchase was made only for one plot at a discount rate of RM188.5 million.
In a statement, LTH chief executive officer Datuk Johan Abdullah said that the investment was in line with LTH’s strategic plan to focus on property development.
Zairil said today that LTH’s land purchase at RM2,773 per sq ft was at least RM500 per sq ft more than other comparable recent transactions in the area.
“This sweetheart deal has effectively allowed 1MDB to rake in a huge profit of RM184 million by acting as nothing more than a land broker,” said the federal lawmaker.
Johan said yesterday that the land purchased by LTH will be used to construct a residential building which will be developed by its subsidiary, TH Properties Sdn Bhd, and is expected to yield “positive returns” to the TH Group.
Police reportedly said yesterday that they will investigate the report lodged by LTH against a local blog that claimed that 1MDB had sold two parcels of 1MDB land in the TRX to LTH for RM772 million and published purported documents of the property transaction.