PKR today refuted Lembaga Tabung Angkatan Tentera's (LTAT) statement that the acquisition of a controversial Bukit Raja land from an Umno leader's firm by its 60-percent controlled Boustead Holdings is a commercially-sound business deal.

NONE "There is no commercial basis whatsoever," said its director of strategy Rafizi Ramli ( left ) in a press conference at the party headquarters in Petaling Jaya, today.

He argued, that despite LTAT's insistence on the "sound business", the stipulated RM130 million price is "exorbitant" and the land will not be able to yield any long-term profits for the company, as it can never be transferred to the company for its land bank.

Firstly, he pointed out that Boustead’s RM130 million stipulated payment to Awan Megah Sdn Bhd, owned by Selangor Wanita Umno chief Raja Ropiaah Raja Abdullah ( below ), is too much as he claimed is worth only half that amount.

He furnished, as proof, extracts of a document which he claimed is the agreement between the government and Awan Megah detailing the land or performance bond, which covers the value of the total project.

NONE The document which the press were given sight of listed the bond as at RM72.5 million.

Performance bonds, or in this case referred to as land bonds, said Rafizi, are standard practice in projects where the owners will require the developer to furnish a performance or guarantee of completion bond to the amount of the project total.

This is so that in the case of the project being abandoned, the developer will have to pay the total bond amount to the owner so it can pay a 'white knight' to rescue or finish the project.

'No deposit for Boustead land bank'

As such, argued Rafizi the project cannot be worth RM130 million as at most, it can only amount to RM72.5 million.

Hence it does not make sense for Boustead to buy the 223-acre land at the price, Rafizi added, stressing that the government-linked company is abusing the pension funds of military personnel.

LTAT, which manages pensions and investment funds for military personnel and veterans, is heavily invested in Boustead.

Furthermore, Rafizi recounted that as the 223 acre land was ceded to the Federal Land Commissioner by the state for the express purpose of building an army base, as per provisions in the National Land Code, he argued that the land therefore cannot be used for any other purpose, or it will revert back to the state.

NONE He cited the recent announcement by the office of Selangor Menteri Besar Abdul Khalid Ibrahim that the state will not allow any other developments to take place on the land other then for an army base, and will not approve any transfer of the said land to other parties .

Even if Boustead were to pay the amount to Raja Ropiaah's Awan Megah, he said it would not get any land to deposit into their land bank, nor would it be able to develop it in the current situation.

"It is a transaction that we know won't happen... even if the land were somehow transferred, it still hinges on the Selangor government's willingness to allow any development to take place".

He was responding to LTAT which had defended the planned Boustead acquisition.

Its chairperson Admiral (Retired) Mohd Anwar Mohd Nor ( above ) maintained that Boustead's corporate exercise was based on commercial reasons and not on other considerations, aimed at expanding Boustead's land bank and generate long-term profits for the company.

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