The case of Phang Li Koon, the previous owner of the Pinhorn Road bungalow currently owned by Chief Minister Lim Guan Eng, has been classified as "no further action" required.

Penang police chief Abdul Ghafar Rajab said the decision was made by the Attorney-General’s Chambers a few days ago.

Phang was earlier accused of making a false statutory declaration when she claimed she had no business dealings with the Penang government.

"It has been classified as no further action," Ghafar said after a police event in George Town today.

Several police reports were lodged against Phang following her statutory declaration,which was read out by Penang executive councillor Phee Boon Poh.

Phee, the Sungai Puyu assemblyperson, is a distant cousin of Phang.

Phang was alleged to have sold the bungalow on Pinhorn Road to Lim at RM2.8 million, which is said to be at below the market price.

Lim, who is also DAP secretary-general, has denied any wrongdoing, saying the unit was purchased on a "willing seller, willing buyer" basis.

Ghafar said Phang's case was classified as "no further action" (NFA) after investigations were carried out by Penang and Bukit Aman police.

Asked why it was classified as such, he replied, "Ask the DPP (deputy public prosecutor).

“We did our investigation and submitted our report to the DPP but the AG's Chambers in Putrajaya made the decision to classify it as NFA," he added.

The controversy surrounding Lim's purchase of the double-storey bungalow first arose when Umno Tasek Gelugor MP Shabudin Yahya questioned if it was linked to the sale of state government land in Taman Manggis.

The Malaysia Anti-Corruption Commission is investigation this matter.

New twist: AG denies case closed on bungalow seller's SD