Penang govt should cancel 559ha land sale to Umech Land

 I am glad that Penang Chief Minister Chow Kon Yeow has stopped issuing statements justifying the Penang Development Corporation (PDC)’s sale of the 559ha land at Byram, Sebarang Perai Selatan, to Umech Land.

Twice he sought to justify the land sale, but on both occasions, the answers he provided raised more questions.

Following the failed attempts, he has said he would refer the controversial land sale to the PDC board meeting for a decision. It is not sure when this meeting will be held.

Perhaps Chow (above) realises that the controversial sale to Umech Land not to Umech Construction has raised questions that remain to be answered.

I am not sure whether the new PDC board has knowledge about the controversial issues surrounding the land sale. Before any decision can be made, I am not sure whether the current PDC management will be able to present the facts objectively and honestly.

In my earlier article, as well as in my recent joint statement with Lee Kah Choon, former PDC board member and advisor to Chow, we categorically denied that we recommended the sale of the PDC land to Umech Construction.

Penang chief minister’s former adviser Lee Kah Choon

In fact, our involvement in the sub-committee that was set up in November 2022 was more about ascertaining facts about the company’s ability to undertake industrial land development.

It was essentially a general discussion, not due diligence to give Umech Construction the approval.

In the subsequent PDC board meeting on Feb 9, 2023, there was no approval given for the sale of the land to Umech Construction.

There could have been numerous meetings within the PDC, between PDC and Umech Construction, and others, but the decision-making rests with the PDC board.

If I can remember, there was no decision taken by the PDC board to approve the land sale.

However, I am not privy to the discussions in the PDC board meetings, if they were held after I left the state government.

As long I was in PDC, there was no decision made to approve the land sale to Umech Construction.

I am prepared to stand by this affirmation if I am called to testify before an investigation committee.

Chow might have given the wrong impression by relying on the information provided by the PDC management.

If anybody knows anything about the proposed deal, it is the PDC management, their earlier participation in the Expo Dubai in 2022, how they identified the potential land purchaser, Umech Construction, and how this company revealed it had the backing of an investor in Dubai.

I used to wonder why would PDC participate in the Expo Dubai to identify a Malaysian company.

Until today, I am not sure about the identity of the investor who was supposed to provide the financial backing for Umech Construction. I don’t think Sunway had its presence in the Expo Dubai.

Anyway, as far as I am concerned, there was no approval given by the PDC board for the sale of the land to Umech Construction. I am prepared to be challenged on this matter.

Anyway, what transpired in the PDC in the last few months, after I ceased to be a board member, up to the signing of the sales and purchase agreement with Umech Land, I have no knowledge.

This is why, in the interest of transparency and accountability, the actual date of the approval of the land sale must made known. In other words, the date of the PDC board meeting that gave the approval.

Why was Sunway brought in?

Not only this, why was there the switch from Umech Construction to Umech Land and why, two days before the S&P agreement, Sunway was brought in to hold 70 percent of the shares of the buyer, Umech Land?

The other shareholders of this company are Cheng Pei Kwan and Nathaniel Rajkumar. I understand they are the other shareholders of Umech Construction.

Umech Construction and Umech Land might be two different companies but with the same shareholders.

The question is, why did the PDC management never divulge the details as to why the land was sold to Umech Land, not Umech Construction, and why the last-minute arrangement to bring in Sunway?

It was through the entry of Sunway as the majority shareholder of Umech Land that the sale of the land was actualised. If Umech Land had such a good financial reputation, why the need to bring in Sunway?

If Umech Land did not have financial strength, PDC could have struck a straightforward deal with Sunway, not in the present convoluted manner.

Sunway is a famous company with sound financial credentials.

This brings us to the question about the financial strength of Umech Land itself, something PDC was convinced it had to develop the industrial plots in Byram. If this is so, why bring in Sunway?

I am sure the PDC management must been aware of these developments. Was critical information withheld in the PDC board meetings? Was Chow fully appraised of the financial standing of Umech Land?

In fact, Chow even commented on Oct 3, 2023, that he was not aware of Sunway’s involvement. He might have instructed PDC to get more details on the last-minute entry of Sunway.

Surely a land development project valued at RM3.5 billion with the creation of thousands of jobs is of great interest to the public in Penang?

I was informed that hundreds of multinational companies are keenly watching how the Penang state government is going to manage the present land deal controversy.

Land deal controversy

On the last day of the meeting of the Penang state executive council somewhere in June 2023, that is before the dissolution of the state assembly, Chow was happy to note that Penang had no major scandals.

I am not sure whether he said it prematurely or not, perhaps he had no premonition of the present land deal controversy.

Land for industrial development is a scarce commodity in Penang. PDC is under tremendous pressure to make industrial land available for foreign and local investors.

It is the lack of industrial land that is one of the main reasons why investors are seeking greener pastures for the availability of land in other states.

Thus, given this land scarcity, there is no excuse for PDC not to have transparent dealings with investors and land purchasers.

This is not to forget that the land that was sold to Umech Land was acquired property of the PDC. In other words, land taken under compulsory acquisition is meant for public purposes.

I wonder what would be the reaction of the original owners of the said land?

Can they take legal action against the PDC and the state government for violating the terms of the land acquisition?

Anyway, it is not too late for the PDC and the state government to put an end to this land sale.

I am sure there are provisions in the S&P that allow the PDC to come out of the deal, provided that Umech Land did not divulge the full details of the requirements of the PDC in effecting the land sale.

A few days back, on Oct 10, 2023, I requested Chow to suspend the land deal indefinitely before a thorough investigation could be conducted on the land sale.

However, as more questions are coming to the fore on the land sale, I suggest both the PDC and the Penang government undertake the unpleasant task of cancelling the land deal with Umech Land.

It is simply not worth pursuing the present land deal that threatens to put to shame all the good work done by the Penang government for the last 15 years.

Once cancellation is done, action should be taken against those individuals whether in PDC, the state government, or outside, who are responsible for this shoddy mess.

Once this is done, PDC, rather than selling raw land to private investors, should develop such land by itself. By doing this, PDC can return to its core activities. - Mkini

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P RAMASAMY is a former Penang deputy chief minister II and former Perai state assemblyperson.

The views expressed here are those of the author/contributor and do not necessarily represent the views of MMKtT.