GEORGE TOWN (Jan 13): The State Land and Mines Office has been instructed not to authorise any land transactions involving 1Malaysia Development Bhd (1MDB) without the state’s prior approval.
Chief Minister Lim Guan Eng (pictured) said this in relation to 1MDB president and group chief executive officer Arul Kanda Kandasamy’s recent admission that the 234 acres of land it purchased in Air Itam here for RM1.38 billion by the group’s property arm, 1MDB Real Estate (Ayer Itam) Sdn Bhd, was not 100%-owned.
“This (Arul’s admission) is shocking because a person buys land to own it 100%. According to the National Land Code and local council development order, if you want to build a house, you must show proof that you have 100% consent from the landowners. It cannot be less than that.
“The state has instructed the State Land and Mines Office not to authorise any land transactions without my approval. Arul needs to clarify with the authorities first.
“They can go to court to challenge the state’s decision if they want. We want to stress here that you cannot use public money to buy out the co-owners,” he told a press conference today.
Lim was commenting on the latest The Edge Malaysia (Jan 11 to 17) cover story featuring an interview with Arul, where the latter (Arul) had said some portions of the Air Itam land are owned on an undivided basis with other parties.
“We have a lot of lots and some of the lots, we have a 14% undivided co-owner meaning that we jointly own the land in that proportion. So any development will need consent of the co-owner. But in real estate, we have mechanisms to deal with this.
“For example, we buy them out. Or give them 100% of a 14% portion. That’s all normal. But first, you need a plan for the land. And that is why you need a development partner to first come in. So, the undivided ownership is not an issue,” Arul was quoted as saying.
In response, Lim told reporters today that without 100% control on the land, the deal was wasted as 1MDB was at the mercy of the 14% (undivided co-owners) who might charge exorbitant prices per square foot for the sale of the ownership.
“This (admission) has affirmed our suspicion that 1MDB did not have 100% control. So you buy a land for RM1.38 billion, but in the end [it] cannot be developed because the local authorities will not approve [of the development] unless the land is 100% owned. That is the law, not just in Penang but nationwide.
“So if you don’t have 100% control, it is a waste — wasting money as you cannot develop the land. Now he admits they did not get 100% control, they are at the mercy of other small landowners.
“They can give incredible prices. [They] might need to buy them out for RM3,000 to RM5,000 per square feet. If you do not pay, you cannot get 100% control. What type of government transaction is this?” Lim asked.
Source : theedgeproperty.com.my