Tabung Haji to sell land in TRX

10 May 2015 / 10:48 H.

    KUALA LUMPUR: Lembaga Tabung Haji, which is planning to sell the 0.66 hectare piece of land in the Tun Razak Exchange (TRX), has received three offers from interested buyers.
    The pilgrimage fund Chairman Datuk Seri Abdul Azeez Abdul Rahim said the three offers would be considered and a decision would be made within two weeks.
    He said the suggestion to sell was made on the advice of Prime Minster Datuk Seri Najib Abdul Razak to avoid the spread of malice and to reduce the negative perception among depositors.
    "One potential buyer has offered RM188.5 million, the price Tabung Haji paid to purchase the land from 1Malaysia Development Bhd (1MDB), but with an additional profit of RM5 million," he told a press conference here today to explain the issues surrounding the land purchase.
    However, Tabung Haji is still awaiting higher bids from the two other potential buyers.
    Explaining further, Abdul Azeez said the land purchase was a commercial decision and not to "bailout" 1MDB.
    He added that the land cost was based on current market value and valuation was carried out by professional valuer, Jones Lang Wootton.
    Abdul Azeez said the sale offer by 1MDB was done in April 2013 at RM220 million and was finalised last month after due consideration by the board for two years and two valuation sessions.
    He said the land has potential to generate returns of nine per cent annually which met its target return on investment of at least six per cent a year.
    "By looking at the Gross Development Value of RM828 milion, and deducting the Gross Development Cost of RM650.5 milion, Tabung Haji is able to make a gain of RM177.5 million," he added.
    Abdul Azeez also said the value of the land at RM2,774 per sq foot was lower than several other transactions done nearby at more than RM3,000 per sq ft including Malaysian Resources Corporation Bhd's purchase of land belonging to the German Embassy.
    On conflict of interest, he said it did not arise as Group Managing Director and Chief Executive Officer Tan Sri Ismee Ismail, who is also a member of 1MDB board of directors, had abstained from all decision making process regarding the land purchase.
    Meanwhile, Deputy Group Managing Director and Chief Executive Officer Datuk Johan Abdullah, who is also Chairman of Edra Energy Sdn Bhd, a subsidiary of 1MDB, and Tabung Haji Investment Panel member Tan Sri Abdul Samad Alias who is also 1MDB Advisory Board Member were also not involved in the final decision making on behalf of 1MDB.
    Abdul Azeez assured depositors that their savings were fully guaranteed by the government and that the funds used for investments were from the RM11 billion asset allocation approved by Tabung Haji's board of directors.

    To date, Tabung Haji has invested RM5.6 billion of asset allocation.
    Abdul Azeez also said the return on investment was used to subsidise the cost of pilgrimage and pilgrim management besides annual dividend distribution.
    Tabung Haji had declared dividends of more than six per cent for the past ten years.
    The pilgrims' board has estimated pilgrimage subsidy of at least RM120 million this year with each pilgrim subsidised RM7,290 per person which helps maintain the pilgrimage cost at RM9,980 per pilgrim against the actual cost of RM17,270 per person. – Bernama

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