Zahid Hamidi denies nod from top in Ropiaah land deal

KUALA LUMPUR, Jan 8 — Defence Minister Datuk Seri Ahmad Zahid Hamidi today finally came out and defended the armed forces pension fund’s involvement in a land deal after a few weeks of silence from his ministry.

Zahid asserted that the planned acquisition of a piece of land from Awan Megah Sdn Bhd for RM130 million and a 80 per cent stake in Astacanggih Sdn Bhd by Boustead Sdn Bhd is a corporate decision by the firm, with no influence from his ministry or the Cabinet. The Lembaga Tabung Angkatan Tentere (LTAT) armed forces pension fund owns 60 per cent of Boustead.

“The transaction is a corporate one ... There was no order from LTAT, Ministry of Defence, or the prime minister to me,” Zahid (picture) told a press conference here.

“It’s a fully commercial decision.”

The minister also debated PKR’s Rafizi Ramli’s allegations that the deal makes no commercial sense, saying that the land in Bukit Raja is actually valued at double the price paid by Boustead.

“The market valuation report (for the land) is worth RM350 million,” he said, referring to a price given by a private land valuer.

Yesterday, Rafizi claimed that the land is only worth RM72.5 million, based on a copy of the privatisation deal for Puspahanas dated July 17, 2009 which showed that Awan Megah was required to provide a land bond totalling RM72.5 million as security.

The land bond, usually called a “performance bond”, is valued the same as a company’s total financial commitment to a project, subject to its performance.

Zahid also pointed out that Boustead’s share price jumped to RM5.96 from RM4.98 after the deal was announced in Bursa Malaysia, further bolstering his claim that the deal makes commercial sense.

“It’s clear that investors are confident with Boustead,” he said.

Zahid repeated the point that no public funds were used in the deal, and that it was financed fully by Boustead, despite LTAT owning a major stake in the company.

The defence minister also mentioned that he is mulling legal action against Rafizi for defaming him.

Two weeks ago, Rafizi accused Zahid of abusing his power by spending public money through LTAT to acquire Astacanggih, which is owned by controversial businessman Deepak Jaikishan.

He called the deal “an outright bribery”, and alleged that it was made to silence Deepak from exposing scandals involving politicians who have dealt with the businessman.

However, Deepak has today offered to buy back his shares sold to Boustead, but did not state his reason for doing so.

Rafizi also claimed that the deal makes no commercial sense since Awan Megah has no track record in construction and possesses a terrible financial record, with only RM6,180 in assets.

He pointed out that the latest financial statement filed by Awan Megah to the Companies Commission of Malaysia showed that its last activity was on December 31, 1993, 12 years before the Puspahanas deal award.