GEORGE TOWN, Jan 13 ― The DAP-led Penang government has instructed the state land office not to approve any transfer for parcels of Air Itam land belonging in part to sovereign investment fund 1Malaysia Development Berhad (1MDB).
Penang Chief Minister Lim Guan Eng said today the decision was due to questions surrounding the purchase of the land as 1MDB does not have 100 per cent ownership of the tracts, and added that the company was free to take legal action if it was unhappy with the state administration.
“The state has instructed the land office not to allow any land transfer without any approval from the state government and the chief minister,” Lim told a news conference here.
He added that 1MDB must first clarify the issues tied to its purchase of the Air Itam land with the Land Office before the state government decides on whether or not to approve the transaction.
“They can take us to court for not approving any land transactions, we will gladly see them in court,” he said.
Lim said the decision was in line with public interest because money spent by 1MDB is public funds.
He said it was incredible that 1MDB had bought the land at RM1.3 billion and yet does have a 100 per cent stake in it.
“This means they are at the mercy of the other landowners and if they want to buy up the share from the other landowners, they could be forced to pay a very high cost and this is public money so they have to explain to the public first why they had purchased the land without having 100 percent control of the land,” he said.
Lim referred to a recent interview published by financial paper The Edge with 1MDB's chief executive Arul Kanda who had admitted that 1MDB had jointly owned some portions of the land with other parties in which any development plans will need the consent of the co-owners.
“He admitted that the land they bought do not wholly belonged to 1MDB and this shocking because by not having 100p er cent ownership of the land, it is useless land,” the Penang lawmaker said, adding that 1MDB will not be able to do anything without 100 per cent consent from the other owners.
He insisted that 1MDB had “wasted money” in purchasing the land jointly with other co-owners.
Last November, Lim reportedly demanded 1MDB explain the land purchase, alleging the company only owned 23.47 acres of the total 234 acres of land purchased at RM1.06 billion.
In the report, Arul also said 1MDB only paid RM1.06 billion out of the total RM1.3 billion for the land while the balance RM240 million was the costs of relocating squatters on the land.
Lim pointed out that Arul has miscalculated and that at least RM600 million is needed to relocate squatters on the land especially when they have been living there for over 100 years.
He said the squatters and their extended families will have to be compensated about RM150,000 each person, which is the cost of a low medium cost unit and this brings the cost to about RM600 million or up to RM800 million.
“This means the costs is higher than his estimates,” he said.
So far, no planning permission had been submitted for the controversial piece of land located the state constituencies of Air Putih and Air Itam, which are controlled by Lim and Wong Hon Wai respectively .
Arul reportedly said the land was initially bought to build affordable homes and to monetise the rest of the land.
The existing residents on that large piece of land also have not received any notices of eviction while 1MDB has not announced any formal plans for that piece of land.