JAKARTA - Indonesian conglomerate the Rajawali Group, a partner in a joint venture with the Ministry of Finance Inc (MoF Inc) in a luxury hotel project in Langkawi, has dismissed talks that it is investing in the Tun Razak Exchange (TRX) in Kuala Lumpur.
“I am not interested in TRX,” chairman and chief executive officer Tan Sri Peter Sondakh said.
“We have enough property business in Malaysia and our portfolio for property is fully-utilised. We have no more funds for property in Malaysia. Maybe other things, but not property,” Sondakh told StarBiz.
Sondakh was commenting on speculation that he would be roped in to invest in the TRX, which is being developed by troubled 1Malaysia Development Bhd (1MDB) as a financial centre. The market talk came about after a proposed corporate deal between the Rajawali Group and Felda Global Ventures Bhd (FGV) valued at US$747mil (RM2.8bil) was announced last week.
In the deal, FGV will acquire a 37% stake in PT Eagle High Plantations Tbk and sugar cane plantations to be paid largely in cash. FGV has come under criticism for several reasons and among them is the premium of more than 70% it would be paying for the stake in Eagle High Plantations.
Sondakh has rebutted allegations that the deal is over-priced stating that shares in Eagle High Plantations were hard to come by and Indonesian plantation companies were not easy to acquire.
The tycoon also denied suggestions that his close relationship with Prime Minister Datuk Seri Najib Tun Razak had helped him with his business ventures in Malaysia.
The Rajawali Group owns the Westin Langkawi Resort and Spa, which it acquired through a tender in 2005. The group also owns the Sheraton Imperial hotel in Kuala Lumpur, which it bought from a local bank.
“Yes, we are friends,” Sondakh said when asked about his relationship with Najib.
The 63-year old billionaire rattled a list of leaders including former US President Bill Clinton and former British Prime Minister John Major that he knew.
“I also know Warren Buffett ,” he said. “I go around in government missions... and so yes I do know Najib. What’s wrong with that?”
Sondakh dismissed suggestions that his friendship with Najib had helped smoothen his business dealings here.
“We don’t get special treatment,” he said, adding that the Rajawali Group was invited by the MoF to build the Langkawi project based on its experience and success in developing the luxurious St Regis hotel in Bali.
Najib was in Langkawi in April to attend the Asean Summit 2015 retreat, which was held at the Langkawi International Convention Centre.
The RM115mil convention centre, together with the RM300mil St Regis Langkawi hotel were developed by a joint venture between the MoF and Sondakh’s Rajawali Group – Integrated Nautical Resort Sdn Bhd.
The Rajawali Group owns a 40% stake in INR, with MoF Inc and Langkawi Development Authority holding 30% each.
The joint venture company had obtained soft loans from Bank Pembangunan Malaysia Bhd for the project.
“The MoF get special financing, we are just the minority partner in the project,” he said.
Sondakh said he acquired Westin Langkawi in 2005 through an international tender and he purchased Sherathon Imperial by acquiring the bad debts of a Malaysian bank.
“I do not call anybody and I don’t get any help from anybody (in Malaysia),” he said.
Sondakh, which is worth an estimated US$2.3bil (RM8.5bil) and is Indonesia’s sixth richest man according to Forbes, first became known in Malaysia in 2005 after he sold a stake in his telecommunications company to Telekom Malaysia Bhd. The company is PT XL Axiata, a unit of Axiata Group Bhd.
Sondakh had earned a reputation as a turnaround specialist in Indonesia and is admired for his strong business acumen.
The TRX project is on a 70acre site in Kuala Lumpur.
The project has been divided into several plots by master developer 1MDB Real Estate Sdn Bhd in a bid to attract investment and speed up development works.
Last month, 1MDB announced that it had signed a sale and purchase agreement with Indonesian developer Mulia Group to undertake the Signature Tower project at TRX.
But Lembaga Tabung Haji, came under heavy public criticism recently for paying cash upfront to secure a prime plot at TRX. The pilgrim fund later said it had found potential buyers for the plot that it could flip for a profit, although no announcement has been made since.
This has led to speculation that the Government, which owns 100% of 1MDB, would be open to selling more TRX plots to foreign investors. - ANN
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