Amidst the raging controversy over Tabung Haji’s overpriced purchase of debt-ridden 1Malaysia Development Bhd (1MDB) land, it is now revealed the civil servants pension fund has made a similar deal.
According to The Star today, Retirement Fund Inc (KWAP) has signed a heads of agreement for purchase of a parcel of Tun Razak Exchange (TRX) land at a price that is 15 percent lower than what the pilgrimage fund had paid.
Citing sources, the English daily reported KWAP will be paying about RM2,300 per square foot (psf) for the land intended for its new headquarters.
According to the report, the rationale was that KWAP is presently renting its present premises at Menara Yayasan Tun Razak at RM4 psf and the move is a “natural step”.
TRX, said the source, was more attractive as the civil service pension fund purportedly “wants to be in an area where the market is, especially one that is going to be an Islamic finance centre”.
However, the sales agreement has yet to be signed.
"The heads of agreement is a prelude to the sales and purchase (S&P) agreement.
“The terms of agreement are also tight where KWAP will only pay 10 percent first and the rest upon completion of the building,” the report quoted the source saying.
KWAP plans to construct its 40-storey headquarters building in TRX costing from RM1 billion to RM1.2 billion, which will face an upcoming underground MRT station.
Not first controversy
Compared to KWAP, Tabung Haji bought it's plot for about RM2,779 psf , or RM188.5 million in total.
Critics claim the transaction is aimed at bailing out cash-strapped 1MDB in the face of mounting debt repayments.
After days of outcry, Tabung Haji on Saturday attempted to douse the anger saying it will now sell the land to recoup the money, on the advice of Prime Minister Najib Abdul Razak who is also 1MDB’s advisory board chairperson.
KWAP had courted similar controversy in the past when it issued a RM4 billion government-guaranteed loan to 1MDB subsidiary SRC International in 2011.
The pension fund, however, has apparently learnt its lesson and has set up a loan monitoring fund to keep track of where its loaned money is going, according to The Star report.
"The lesson learnt is that we as a lender need to exercise some form of moral obligation and be a responsible lender," KWAP CEO Wan Kamaruzaman Wan Ahmad told The Star in April.