BNM sets record straight on RM2 billion land purchase

PETALING JAYA: In response to allegations that Bank Negara Malaysia (BNM) overpaid for a RM2 billion land purchase from the Ministry of Finance (MoF), the central bank stated that the benchmark used was not appropriate considering that it is not located within the same vicinity.

A local daily quoted sources as saying that the central bank overpaid for the land transaction, which is earmarked for development of a financial education hub. The land purchase is in the spotlight again after Finance Minister Lim Guan Eng confirmed that the ministry, under the rule of the previous government, had used proceeds from the deal to pay for 1Malaysia Development Bhd’s debts.

“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 3km away, whereas Lot 41 is contiguous to BNM’s existing land and has 453,851 sq ft of functional built-up space in existing buildings,” the central bank said on its “Fact Watch” website.

BNM also confirmed that Suleiman & Co was appointed as the independent private sector valuer of the land on Aug 21, 2017 to determine the market price of the property.

Calling it an arms-length transaction, Bank Negara Malaysia governor Tan Sri Muhammad Ibrahim has repeatedly denied that political pressure had led to the land deal.

BNM further clarified that the land is classified as “institutional” under the KL City Plan 2020, and not under the agriculture, building or residential category.

It said the land does not require any conversion of title as there is no restriction for the land to be used for institutional purposes.
Following that, the central bank also said no valuation adjustment is required.

Meanwhile, BNM highlighted that Tan Sri Irwan Serigar Abdullah, who was a member of the central bank’s board of directors, had recused himself from all meetings as well as deliberations on the land acquisition in view of his common directorship and conflict of interest in the matter.

The deal was done through MoF’s special purpose vehicle Hartanah Mampan Sdn Bhd, in which Irwan Serigar held a directorship.