Najib says Tabung Haji land deal issue manipulated, not a 1MDB bail out

Prime Minister Datuk Seri Najib Razak says Muslim pilgrims' fund Lembaga Tabung Haji's purchase of the land form 1MDB is not a bail out when there are private companies wlling to buy the property at the same prices – The Malaysian Insider pic, May 10, 2015.Datuk Seri Najib Razak today denied Lembaga Tabung Haji's RM188.5 million land buy from 1Malaysia Development Bhd (1MDB) was a bail out, saying the deal was twisted to mean pilgrim depositors' money was used to rescue the debt-laden state strategic investor.

The Prime Minister and Finance Minister said he advised Tabung Haji to sell the 0.64 hectare land to avoid prolonging the controversial land purchase.

"We do not want to continue with this controversy because it will take away a lot of our energy in terms of concentrating on some of the big programmes that we have in mind," he saud after launching the Kota Belud People's Housing Project (PPR) in Sabah.

State news agency Bernama said Najib was asked about Tabung Haji's announcement that it would sell off the land it purchased from 1MDB.

Najib also said turning the land over to the private sector was a good commercial deal, which would see Tabung Haji make a few million ringgit overnight.

"So, it cannot be a bail out (for 1MDB). No private company will buy over a project if the company is going to lose money," he said while on a two-day visit of Sabah.

The pilgrim fund chairman Datuk Seri Abdul Azeez Abdul Rahim said yesterday Tabung Haji planned to sell the land in the Tun Razak Exchange (TRX), after receiving three offers from interested buyers.

Tabung Haji's fund size is said to be about RM45.7 billion last year and its current asset portfolio is divided into 40% for equities, 30% for fixed income and 20% for properties.

Its properties division has invested in Malaysia, Saudi Arabia and United Kingdom, apart from plantations in the country. It also has equity in Bank Islam Malaysia and in the oil and gas sector.

The purchase of a plot of land from 1MDB for RM188.5 million for the purpose of building a residential tower has created uproar among its depositors, some of whom even withdrew their savings at its branch in Shah Alam on Thursday.

Opposition politicians were quick to note that Tabung Haji was paying far more per square feet (psf) than what 1MDB paid at RM64 psf, when it first bought the land from the government, leading some to call the deal a "bailout", given 1MDB's massive debts.

Umno leaders, including deputy president and Deputy Prime Minister Tan Sri Muhyiddin Yassin, have also criticised the deal as 1MDB's RM42 billion debt was a well-known fact.

- TMI