Bank Negara Malaysia (BNM) is believed to have overpaid for the 67.41 acres of land it bought from the Finance Ministry (MOF), at RM2.066billion, from which the proceeds were use to service 1MDB's debt obligations, The Star reported.
Although the deal concluded at RM703.44 per square foot (psf), a source was quoted as saying that a special purpose vehicle, created by MOF, had initially asked for "a four-figure on a psf basis".
Sources said that Bank Negara wanted the land, which is located beside the bank's Sasana Kijang complex in Kuala Lumpur, only for its training purpose, thus there was "no need" to fork out that much money.
On May 24, Finance Minister Lim Guan Eng confirmed that BNM and Khazanah funds were used to service 1MDB's debts to International Petroleum Investment Co (IPIC).
This involved the RM2.066 billion land deal involving Bank Negara and Khazanah’s redemption of investments amounting to RM1.199 billion.
Sources cited another transaction where MOF sold its 19.14-acre land near the palace at a much lower price to Jakel Land Sdn Bhd.
The plot was put up for tender at a reverse price of RM833.3 million or RM1,000 psf in the first quarter of 2016. However, MOF dropped the price in a subsequent second open tender later that year, and concluded the sale at RM774.90 psf or RM646 million.
Sources used the Jakel land sale as “the market benchmark”.
“We have two pieces of land sold at about RM700 psf around the same time, in the same area. Because Bank Negara’s land is bigger, on a psf basis, Bank Negara’s psf should be a lot lower than Jakel’s RM775 psf. So, let’s drop that to RM500 psf, although I am not saying the price should be that,” a source was quoted as saying.
Hartanah Mampan Sdn Bhd (HMSB), an indirectly wholly-owned special purpose vehicle of the MOF, which was set up in October 2017, sold the land to Bank Negara two months later.
According to a company search, MOF secretary-general Mohd Irwan Serigar Abdullah, who sat on Bank Negara's board by virtue of his Treasury position, was HMSB's director.
Other directors include MOF's under-secretary of the strategic investment division and deputy secretary Yusof Ismail, and the MoF’s government investment companies division secretary Asri Hamidin.