Was Tabung Haji land deal to service 1MDB’s debt, asks PKR

PETALING JAYA (May 8): PKR today raised suspicions over the timing of the sale of debt-ridden 1Malaysia Development Bhd's (1MDB) land to Lembaga Tabung Haji (TH) for RM188.5 million, saying the amount was close to the interest the state investment firm has to pay next week.

While not denying that the 0.63ha in the Kuala Lumpur city centre has potential to be developed, PKR secretary-general Rafizi Ramli said the site belonged to the federal government and 1MDB should not profit from it.

"Are the monies from Tabung Haji's depositors being used to help 1MDB to pay off the interest of its loan?

"This situation is nearly the same as the move by the federal government to inject RM950 million into 1MDB last March, which was also close to the date it had to pay off the interests of its loan," he said in a statement today.

Two months ago, Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah confirmed giving 1MDB RM950 million as standby credit for it to service its RM42 billion debt, a day after Singapore Business Times reported that Putrajaya had given the news.

LTH, a savings fund for Muslims planning pilgrimages to Mecca, yesterday said it had bought a parcel of land from the state investment vehicle's Tun Razak Exchange (TRX) project for RM188.5 million, which it claimed was a "discounted" price.

It planned to build a residential tower at the site.

“The investment is a commercial decision which fits with Tabung Haji's risk appetite and went through all internal process accordingly," Tabung Haji chief executive officer Datuk Johan Abdullah said in a statement. 

However, opposition lawmaker Zairil Khir Johari said LTH had paid an "unbelievably exorbitant" price per square feet (psf) for the land, compared with what 1MDB had paid for the land at RM64 psf four years ago and that LTH overpaid the company by at least RM500 psf.

Insisting the transaction would forever be seen as a bailout, the Pandan MP said 1MDB bought the land from Putrajaya at RM74.20 psf, only to resell it to LTH at RM2,779 psf.

He said there were two ways to ensure LTH could buy the land without sacrificing the welfare of its depositors: by either purchasing it directly from the federal government at the same "discounted price" Putrajaya had given to 1MDB or to buying it from 1MDB at a forced sale value or auction.

He said the transaction has yet to be sealed as ownership had not been transferred to LTH. This, said Rafizi, meant the contract had yet to be finalised and 1MDB did not fulfil all the terms and conditions.

"As such, there is still a chance to stop this and ensure that the RM188.5 million belonging to Tabung Haji's depositors are not touched.”

He also urged Prime Minister Datuk Seri Najib Razak and Federal Territories Minister Datuk Seri Tengku Adnan Tengku Mansor to use their powers to stop the transaction.

Rafizi will also be meeting with Tabung Haji depositors next Wednesday night to launch a campaign to abort the land purchase.