Amid questions, 1MDB now says may sell Pulau indah, Air Itam real estate

1MDB’s Arul Kanda Kandasamy says the Cabinet had been informed of the company’s intention to buy two large parcels of land in Selangor and Penang. ― File pic
1MDB’s Arul Kanda Kandasamy says the Cabinet had been informed of the company’s intention to buy two large parcels of land in Selangor and Penang. ― File pic

KUALA LUMPUR, June 30 ― Debt-riddled 1Malaysia Development berhad (1MDB) announced today it has received “significant” proposals to buy two large parcels of land in Selangor and Penang even as critics question the state-owned investment’s purchase of them.

In a statement, 1MDB chief executive Arul Kanda Kandasamy said the Cabinet had been informed of the company’s intention to “monetise” its land in Pulau Indah, Selangor and Air Itam, Penang through joint ventures or outright sales on February 15 this year.

“I am pleased to update that we have received significant expressions of interest in both land parcels.

“Accordingly, 1MDB intends to appoint an independent real estate consultant to assist in reviewing the various proposals,” he said.

Arul added that the company will appoint an independent real estate consultant to review the proposals and will provide an update of the development in the next two weeks.

1MDB’s announcement comes as opposition lawmaker Tony Pua shines a spotlight on the real estate, in particular the 125-hectare land in Pulau Indah the company bought for RM282 million from Tadmax Resources Bhd, after securing a US$150-million (RM540 million) loan from Export Import (EXIM) Bank.

The DAP MP has suggested the transaction to be a front to bail out troubled government-linked companies, pointing out that Tadmax was formerly known as Wijaya Baru Global Bhd before November 2013, and that Wijaya known for its involvement in the RM12.5 billion Port Klang Free Zone (PKFZ) scandal.

Pua also pointed out recently that 1MDB’s US$150 million loan was more than double the RM262 million outstanding amount payable to Tadmax for the Pulau Indah land purchase, which was only valued at RM9.93 per square feet (psf) in August 2011 but was sold to 1MDB for a massive profit of RM21.80 psf.

1MDB’s RM1.38 billion purchase of a 234-acre land in Air Itam in 2013 was at that time believed to fulfil one of Barisan Nasional's (BN) 2013 general election promises to build 9,999 units of affordable housing in Penang.

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