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Wednesday, February 26, 2014

Tadmax: 'Oxford Pua' counted wrongly


Tadmax Resources Bhd has defended its RM317 million Pulau Indah land sale to 1Malaysia Development Board (1MDB) as a "fair priced deal" and not a government bid to bailout the loss-making company as alleged by DAP.

Tadmax's CEO Faizal Abdullah (right) said that DAP MP Tony Pua, who alleged that 1MDB paid inflated prices for the land in Klang, has not done his sums diligently.

"I am very surprised, and I'm not being sarcastic here, that with Tony Pua - he has a degree in economics from Oxford - but still doesn't know this.

"When we are speaking of properties under ‘stock and inventory’ we don't do a valuation. We carry it base on historical cost," Faizal told Malaysiakini.

Yesterday, Pua, who is the MP for Petaling Jaya Utara, had told reporters that 1MDB's purchase of the 310 acres of Pulau Indah land raised serious questions as it was 136 percent higher than what the land was valued at just 2.5 years ago, when Tadmax had accounted for it at RM9.93per square foot (psf).

Based on the price which 1MDB paid, the land was purchased at RM23.50 psf on Feb 20. The purchase also caused Tadmax's share price to rally sharply on Bursa Malaysia.

Pua had based his calculations on the valuation of the land as noted by Tadmax in its 2012 annual report. Faizal said this was the wrong way to compute the land's value.

He noted that the land had not been re-valued since it was purchased in 2005. Therefore, the inflation in price was over eight years, not 2.5 years.

Faizal, also the Kapar Umno deputy chairperson, felt that Pua had made a political attack with no grounding.

He added that 1MDB has been talking with Tadmax for the land purchase since September last year.

"It is a very fair deal... For us, it would provide cost savings on our interest charges as the vacant land was not yielding any returns," Faizal said.

"Prior to that, there were offers from other parties but we didn't find it attractive," he added.
              
Tadmax Resources was formerly known as Wijaya Baru Global Bhd. Its subsidiary Kuala Dimensi Sdn Bhd was the construction company engulfed in the Port Klang Free Zone scandal.

Normal increase

Faizal said that back in 2000, the government had already valued land at Port Klang area, nearby to its Pulau Indah piece of land, at RM21 psf. He reiterated again that its sale price of RM23.50 psf to 1MDB was therefore not inflated.

"In 13 years, that's only a rise of what? RM2.50 psf? For land prices to increase 30-40 percent every 3-4 years is normal," he said.

During the press conference yesterday Pua did emphasize that Tadmax had no fault for selling at a profit. He questioned instead if 1MDB was wasting taxpayers' money on the purchase which also did not seem to gel with the company's stated mission.

He said that 1MDB has gone heavily into debt simply to transform itself into a property developer and power producer in the country instead of investing in new industries to bring Malaysia to the next level of economic growth.

1MDB officials have yet to respond yet to Malaysiakini's emailed queries.

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