SPV pocketed RM800m in profit from sale of rubber land acquired from RRIM to Kwasa Land
By RAHIMI YUNUS
The Malaysian Rubber Board (MRB) would seek legal recourse if investigations by the National Audit Department (NAD) showed wrongdoings in the agency’s RM1.5 billion land sale to a special-purpose vehicle (SPV).
The Primary Industries Ministry revealed yesterday that MRB, popularly known as the Rubber Research Institute of Malaysia (RRIM), had been shortchanged by RM800 million from the 2,800-acre (1,133ha) land sale to Aset Tanah Nasional Bhd (ATNB).
ATNB, an SPV owned by the Ministry of Finance, subsequently sold the land — known as Lot 481 — in Sungai Buloh to Kwasa Land Sdn Bhd for a price tag of RM2.28 billion.
The deal, sanctioned by the former government, saw the SPV pocketing RM800 million in profit from Kwasa Land, a wholly owned subsidiary of state-owned pension fund, the Employees Provident Fund (EPF).
MRB chairman Sankara N Nair said the board has reported the suspicious transaction to the NAD for a thorough audit and further investigation.
He said the auditor-general (A-G) has the power to trace the RM800 million, including the documents related to the deals.
“Only when we get the report of the A-G’s probe will we be able to identify whether there are elements for a Malaysian Anti-Corruption Commission (MACC) or police investigation.
“If there is malfeasance in public office, then MRB will file civil suits as well to recover the RM800 million with interest,” he told The Malaysian Reserve in a text message.
MRB claimed it is entitled to the RM800 million difference, which has yet to be accounted for to-date. The board, which originally owns more than 3,400 acres of land in Sungai Buloh, also believed the initial selling price was lower than the market value.
Yesterday’s revelation was made by Primary Industries Minister Teresa Kok in Putrajaya.
“Simply put, somebody made a big chunk of profit of about RM800 million on the land sale,” she said at a press conference.
At the same press conference, Sankara said MRB, which was established to develop the country’s rubber industry, viewed the original RM1.5 billion land sale deal as below the market value.
“It was basically forced down their throats. That’s the way to put it,” Sankara said.
Kwasa Land is the owner and master developer of the land in Sungai Buloh that borders the Subang Airport. It plans to create a massive township built around key mass rapid transit stations.The stations have been operational since December 2016.
The company’s website said the township development will span a period of 15 years and works started in 2013.
Meanwhile, the EPF said Kwasa Land’s purchase of the 2,330-acre land from ATNB was done at an arm’s length basis for the development of Kwasa Damansara, a township with a mix of residential and commercial properties, infrastructure and public amenities.
“The EPF follows a strict framework in all of its investments, which requires it to conduct robust due diligence prior to any transaction. The RM2.28 billion purchase price was reflective of the fair market value of the land, given its prime location between Kota Damansara and Sungai Buloh,” the fund said in statement yesterday.
“The EPF has no knowledge of any subsequent arrangements between the MRB and ATNB as raised by Primary Industries Minister Teresa Kok in the news today,” the fund said.
Besides the land deal, MRB also claimed it suffered a RM70 million loss linked to the implementation of five facilities on its remaining 585-acre plot on Lot 481.
Kok said the previous Cabinet had allowed MRB to use the RM1.5 billion proceeds from the land sale to build a new lab, an office tower, a discovery centre or museum, sports facilities and a complex for transfer of technology.
She claimed a project delivery partner (PDP) was appointed without a proper board approval. Kok said a project management consultant was appointed based on MRB’s board resolution.
However, MRB terminated the PDP in February 2018, and the current board members who were appointed after the 14th General Election had discovered questionable dealings by certain MRB officers in relations to the five facilities.
Sankara said the board lodged a report to the MACC on Nov 27, 2018, for breach of MRB’s procedures which cost the government-owned agency RM70 million in losses.
MRB also declared an immediate moratorium on all future developments of all MRB-owned lands.
Kok said MRB had sidetracked from its original objective of undertaking world-class research and development related to the rubber industry, but instead had ventured into land development.
The government, she said, had instructed MRB to undergo reforms to return the agency to its original objective.
Established in 1925, Malaysia’s RRIM rose to prominence as among the best rubber research institute in the world with ground-breaking findings like the Standard Malaysian Rubber and robust rubber clones.
However, the slow demise of the rubber industry, largely replaced by oil palm, had dented the sector’s growth and the role of the agency.