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Cover Story: Prominent names in land deals with foundation

TheEdge Thu, Aug 22, 2019 04:00pm - 9 months ago

SINCE Yayasan Wilayah Persekutuan’s (YWP) entry into property, the foundation has not only undertaken property development projects on a joint-venture basis but it has also purchased assets and sold land for profit.

A search conducted by The Edge on YWP’s property-related activities has revealed several prominent names — listed entities and individuals.

Apart from listed entity Malton Bhd, which is involved in the Taman Rimba Kiara project via Memang Perkasa Sdn Bhd, other listed entities linked directly or to individuals who are also shareholders of listed companies that had or have dealings with YWP are Ekovest Bhd, Sunway Bhd, Tadmax Resources Bhd and Federal International Holdings Bhd.

One individual who stands out is former Federal Territories and Urban Well-being Minister Datuk Seri Utama Raja Nong Chik Raja Zainal Abidin, who was the FT minister from April 2009 to May 2013.

A document sighted by The Edge reveals that YWP had in 2016 purchased a building in Jalan Raja Abdullah from Kumpulan RZA Harta Sdn Bhd for RM11.5 million. YWP CEO Zaizalnizam Zainun, in confirming the purchase of the building at the time Datuk Seri Tengku Adnan Tengku Mansor was the FT minister, says the building is now being used as YWP’s headquarters.

“We looked everywhere [to base our new office] but settled on this current location [as it was] easier to relocate from DBKL 2 and DBKL 3,” he says. YWP’s offices had earlier been located in the two DBKL office buildings. When asked if it felt awkward to buy the asset from the former FT minister, he says “No. The management at that time decided that this was the best place [to have the headquarters].”

Apart from the RM11.5 million paid to purchase the building, YWP pumped in RM8 million to RM9 million on renovations. “This was a very old building. We had to strengthen the structure,” he says, adding that it took about a year to complete the renovations.

A check on RZA Harta on the Companies Commission of Malaysia website reveals that it is wholly-owned by Kumpulan Rza Sdn Bhd — a company Raja Nong Chik owns with his six siblings. Raja Nong Chik’s stake in the company is 14.81%.

When contacted, Raja Nong Chik explains that the sale was an arms-length deal and that the sales and purchase agreement was signed on Jan 28, 2016, almost three years after he had left office. The transaction, he says, was handled by the management of YWP at that time — former CEO Datuk Roslan Hasan and the current CEO Zaizalnizam. Nong Chick adds that he did not speak to Tengku Adnan, who was chairman of YWP at that time, so that his position would not be jeopardised.

Another noticeable deal involves the resale of a parcel months after it was purchased. Based on documents sighted by The Edge, in May 2015, YWP purchased a parcel  measuring 2.61 acres in Jalan Raden Tengah, Bandar Baru Sri Petaling, from DBKL for RM30.48 million. Soon after, in August of the same year, the same parcel was sold to I-Con Empire Sdn Bhd for RM35.48 million, giving YWP a RM5 million profit.

Yet another parcel that YWP purchased from DBKL is in Jalan Imbi. Bought for RM21.308 million, it was later sold to Lembaran Beruntung for RM30 million. It was reported last year that Ho Wah Genting Property Sdn Bhd will be building a 60-storey hotel with 600 rooms on the site on a joint-venture basis with the landowner, Lembaran Beruntung. (See Table 1)

According to Lembaran Beruntung shareholder Datuk Jackson Tan Kak Seng, he did not purchase the land. Instead, he bought the company that had purchased the land from YWP. Tan is also a substantial shareholder of Tadmax Resources Bhd with a 7.19% stake. Incidentally, former FT minister Tengku Adnan was the seventh largest shareholder of Tadmax in 2013, with a 1.9% stake.

When asked about YWP making a profit by flipping the land, Zaizalnizam says that he would rather not refer to the act as a flip as the money made was used for charitable purposes. “We are not here to flip ... we do not arbitrarily do it,” he says, adding that the money was used to help the citizens of Wilayah Persekutuan. Moreover, not all land parcels are bought and sold. Many have a joint-venture partner to develop them, he points out.

On how the purchase of the two parcels from DBKL, and the subsequent sales, transpired, Zaizalnizam says, “A developer wanted to develop the land, so we applied and got it from DBKL. We [then] said [we are] selling at this price, who is willing to buy from us?”

Meanwhile, at least three other parcels originally purchased from the Department of Lands and Mines Wilayah Persekutuan Kuala Lumpur (Pejabat Tanah & Galian) (PTG) also appear to have been alienated to other parties ahead of developing the land.

JV partner Wealthy Peninsular Sdn Bhd paid YWP RM7.3 million for a parcel in Jalan Tuanku Abdul Rahman. Zaizalnizam says the payment followed a renegotiation of the JV partnership as the partner was unable to complete the planned project.

Two other parcels were sold by YWP to Austral Meridian Property Sdn Bhd and Ekovest Land Sdn Bhd. Documents sighted by The Edge reveal that YWP “divested off” a plot of land in Titiwangsa in 2015 to Ekovest Land, a wholly-owned subsidiary of Ekovest Bhd for RM10 million. The land is listed under Project EkoRiver centre in Ekovest’s annual report.

YWP had alienated a 2.3-acre parcel in Jalan Peel, Cheras, to Austral Meridian for an estimated RM31 million in 2015. Subsequently, in 2017, Sunway Bhd announced that it had purchased 50% plus 1 share in Austral Meridian, which owned several adjoining parcels measuring a total of 8.45 acres. Austral Meridian’s name has been changed Sunway Velocity Two Sdn Bhd and it is currently the developer undertaking a project with a gross development value of RM2 billion. The 2.3-acre parcel purchased from YWP forms part of the proposed development.

One of the partners in Sunway Velocity is CRSC Property Sdn Bhd, with a 10% stake. CRSC Property is also linked to another project by YWP, undertaken by Tanda Warisan Sdn Bhd. CRSC Property held a 20% stake in Tanda Warisan while Huatland Development Sdn Bhd held the rest. YWP did not provide any details on its partnership with Tanda Warisan despite multiple requests.

While the returns from most of the JVs are through property development, Zaizalnizam says, there are some agreements with different conditions. And once these conditions are met, the land is transferred to the JV party and YWP receives its part of the settlement. An example of such a condition is the relocation of squatters.


Who are the JV partners?

Meanwhile, YWP’s joint-venture partners include Panorama Benua Sdn Bhd, Lakaran Ceria Sdn Bhd, Syarikat Kontrektor Muda Jaya Sdn Bhd and Aspire Causeway Sdn Bhd. (See Table 2)

Panorama Benua — which is planning to build serviced apartments in Sungai Besi — is owned by BKSC Development (80%) and Casa Paradise Sdn Bhd (20%). BKSC Development is wholly-owned by Penang-based Masmeyer Holdings Sdn Bhd, which is controlled by Datuk Choo Beng Kai. Casa Paradise is owned by Azizulrahman Mohd Hussein Malim.

Lakaran Ceria, which is planning to develop serviced apartments in Air Panas, Setapak, is owned by another Penang-based property developer, GSD Land (M) Sdn Bhd. The names behind the company include Khor Chong Hai (65%) and Khor Chong Guan (20%).

A company called Syarikat Kontrektor Muda Jaya Sdn Bhd, meanwhile, is jointly building a boutique hotel in Brickfields with YWP. The shareholders are Datuk Choy Wai Cheong and Datuk Choy Wai Hin, who own the company equally. The two are linked to Federal International Holdings  with Wai Cheong holding 13.09% equity interest and Wai Hin 15.37%.

Yet another joint-venture party is Aspire Causeway Sdn Bhd, which is wholly owned by Exsim Development Sdn Bhd. The JV is building 1,862 affordable homes in Salak South. Seventy per cent of the project has been completed.



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