BNM ‘overpaid’ for govt land, proceeds went to settling 1MDB debt, PAC finds

 

Questions are being asked whether Bank Negara Malaysia was pressured to buy the land, the Public Accounts Committee says.

PETALING JAYA: Bank Negara Malaysia (BNM) “overpaid” for a piece of government land it did not plan to buy, the Public Accounts Committee (PAC) said today.

In its report on the purchase of the land known as Lot 41, the PAC said the proceeds from the RM2.07bil sale to BNM went towards repaying 1MDB debts.

It also said the insufficient due diligence raised questions as to whether BNM were pressured into buying the land.

BNM had purchased the plot of land in December 2017.

“BNM did not plan to purchase Lot 41 before an offer was made by the finance ministry.

“There was no plan to purchase the land in BNM’s annual strategic planning for 2015 to 2017 though BNM stated that the purpose of the purchase was to develop a financial services education hub for the long term,” it said.

The PAC also said the RM2.07 billion price tag, based on an evaluation conducted by Suleiman & Co, was particularly high.

It pointed out that the Valuation and Property Services Department had evaluated the lot at around RM1.42 billion based on the existing ownership status.

It said paying RM2.07 billion was not justified when the land use on the title had not been changed.

The PAC urged BNM to quickly resolve Lot 41’s land use issue and finalise its plans in order to optimise the plot of land.

It also said it was important that BNM was not influenced by external parties in making decisions related to its investments and developments.

According to an auditor-general’s report last year, delays in the development of Lot 41 had resulted in a loss in return on investments of up to RM124.58 million since the land purchase was made.

The audit report found that boundary issues within the 55.79-acre land area remained unresolved between the central bank and other temporary occupiers, causing setbacks in developing the land into an education hub given its proximity to BNM’s Sasana Kijang complex and the Asia School of Business.

The audit also found that discrepancies in rental rates among the current land tenants had resulted in further losses in rental income amounting to RM7.56 million. -FMT