Bank Negara said to have overpaid for land bought from MoF

Bank Negara said to have overpaid for land bought from MoF

According to the The Star article dated 30 May 2018 entitled “Bank Negara said to have overpaid for land bought from MoF”, Bank Negara is believed to have overpaid for the land it had bought from the Finance Ministry (MoF) when it forked out RM2.066bil for the 67.41 acres.

 

Claim 1:

Bank Negara is believed to have overpaid for the land it had bought from the Finance Ministry (MoF) when it forked out RM2.066bil for the 67.41 acres.

Fact 1:

The land size quoted in the article is inaccurate. As per Bank Negara Malaysia’s press release issued 4 January 2018 on the purchase of land, it is stated that the size of land acquired is a total of 55.79 acres. The purchase was agreed upon by both parties based on market price and supported by an independent private sector property valuation firm.


Claim 2:

The article also claimed that “In general, it would be categorized as agriculture, building or residential, meaning Bank Negara must pay a sizeable amount for conversion fees”.

Fact 2:

The land status is currently classified as “Institutional” under the KL City Plan 2020. There is no restriction for the land to be used for institutional purposes and hence no conversion of title is required.


Claim 3:

Sources used the Jakel land sale as “the market benchmark” although it is about one-third the size of Bank Negara’s 67.14 acres.

Fact 3:

The basis used by these ‘sources’ is not clear. The use of the Jakel land sale as the market benchmark is not an accurate comparison as the land purchased by Jakel is located over 3 km away, whereas Lot 41 is contiguous to Bank Negara Malaysia’s existing land and has 453,851 square feet of functional built-up space in existing buildings.


Claim 4:

Jakel’s parcel comes with a commercial title, with a plot ratio of 1:5 versus Bank Negara’s unconverted plot. So the Bank Negara plot must be adjusted lower again, from RM500 psf to RM300 psf.

Fact 4:

There is no restriction for the land to be used for institutional purposes, in particular for the Financial Education Hub. The land status has been classified as “Institutional” under the KL City Plan 2020. Given this, no valuation adjustment is required. There are also existing buildings ready to be used on the land.


Claim 5:

Property consultancy Suleiman & Co is said to have done the valuation for Lot 41. The director and son of company founder Azlan Harris said: I don’t know anything about it.

Fact 5:

Suleiman & Co was appointed as the independent private sector valuer of the land on 21 August 2017 to determine the market price of the property.


Claim 6:

According to a company search, SPV Hartanah Mampan had four directors, Tan Sri Mohd Irwan Serigar Abdullah, the former Treasury secretary-general, was among them. Irwan was also on Bank Negara’s board by virtue of his Treasury position.

Fact 6:

Given Tan Sri Mohd Irwan Serigar Abdullah’s common directorship and conflict of interest in the matter, he recused himself from all Bank Negara Malaysia’s Board of Directors’ meetings and deliberations on the Lot 41 land acquisition.

 

Source: The Star Online, 30 May 2018

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