BNM fails to conduct thorough due diligence on Lot 41 acquisition

The central bank raised eyebrows when it bought the 22.58ha land, known as Lot 41 at the height of the 1MDB scandal

by AZREEN HANI / pic by TMR FILE

BANK Negara Malaysia (BNM) did not exercise sufficient due diligence in the purchase of a piece of land for the purpose of funding the 1Malaysia Development Bhd (1MDB) rationalisation plan in 2017, according to the Public Accounts Committee (PAC).

PAC chairman Wong Kah Woh said the acquisition of land of Grant 18335, Lot 41, Section 51, Bandar Kuala Lumpur (Lot 41) was made through the jurisdiction of BNM and the Ministry of Finance (MoF).

“BNM directors decided to purchase Lot 41 within nine days after discussions with the MoF (on Aug 15, 2017), and three days after the offer was submitted by the ministry (Aug 21, 2017),” Wong said in a statement yesterday.

“Transactions procurement is completed within a short period of four months. All these raises doubt as to whether BNM is under pressure from the government in decision making,” he added.

BNM raised eyebrows when it bought the 22.58ha land, known as Lot 41 at the height of the 1MDB scandal.

According to the Auditor-General’s (A-G) Report last year, a project to develop the land for BNM’s education hub is hampered by boundary issues between the new owners and temporary occupiers that also included other government agencies.

The existing land tenants include the Malaysian Space Agency, the International University of Malaya-Wales, the Malaysian AntiCorruption Commission and the Ministry of Defence, A-G Datuk Nik Azman Nik Abdul Majid stated in the 2020 report.

“BNM’s RM2.07 billion acquisition in December 2017 has yet to bring in any returns. Based on an audit analysis, the central bank could have made a profit of RM9.49 million from bond investments or RM124.58 million in a fixed deposit investment between December 2017 and September 2020 based on the land value agreed,” he said.

Meanwhile, PAC in its report also found that the RM2.07 billion acquisition price paid by BNM, was higher than the assessment done by the Valuation and Property Services Department.

Wong added that the sale of Lot 41 to BNM was made by the government through a special purpose vehicle Hartanah Mampan Sdn Bhd which involved two transactions in December 2017.

“BNM never planned to buy Lot 41 before the offer was submitted by the MoF. The land acquisition of Lot 41 does not exist in BNM’s annual strategic planning for the period 2015 to 2017 and despite BNM’s statement that the purpose of the purchase was to develop a financial services education hub in the long run,” he added.

The PAC of Parliament recommended that BNM is able to make relevant investment decisions and development independently without being influenced by any party.

It also proposed for the central bank to immediately resolve the issue of changing the Use Category Land and subdivision of Land Lot 41.

“A proper plan to optimise the utilisation of Lot 41 needs to be finalised,” said Wong.

RELATED ARTICLES

Thursday, August 25, 2022

More cases awaiting Najib