RM8.8bill Of Malaysian Taxpayers' Money Allegedly Used To Acquire Battersea Power Station

Pavither June 19, 2018

The new Malaysian government plans to review the Employees Provident Fund (EPF) and Permodalan Nasional’s acquisition of the Battersea Power Station in the UK, reported The Guardian.

According to Pakatan Harapan’s Leader Anwar Ibrahim, who visited London to meet the country’s officials, there is a need to probe the transaction as it used the money of Malaysian taxpayers. More important, the new government is uncovering evidence that the previous administration led by former PM Najib Razak used the people’s hard-earned money to repay the huge debt of the corruption-ridden 1Malaysia Development Bhd (1MDB).

“All deals considered dubious, including investments in housing in London, will have to be investigated. Yes, that includes Battersea. Because they were made using state funds. We have to be convinced that this was the right investment decision and that there was no political influence or direction (within Malaysia),” he said.

“If there is something wrong, then we will want to renegotiate. We are looking at umpteen deals extending to hundreds of billions of ringgit – that is tens of billions of dollars.”

The new Pakatan Harapan-led government alleged that over US$4 billion (RM15.95 billion) was stolen from 1MDB sovereign wealth fund created by Najib. At present, the authorities are currently reviewing mega projects implemented by the prior administration due to fears that these could have been overvalued, with some of the money diverted to repay the large debt of 1MDB.

“You look at every deal from housing in London to railways built by China. But even I am shocked to the extent he seems to have gone to earn more to cover up the 1MDB fiasco,” he said.

Anwar claimed that the UK government had made no effort to help in the 1MDB investigation even though $1.83 billion of Malaysia’s money was channelled into a Saudi-British company.

“There was no attempt by British authorities to investigate. But this was a crime using sovereign wealth funds for reckless spending sprees. I am seeking support from the British government and from the foreign secretary, Boris Johnson.”

In contrast, he lauded Malaysia’s neighbour Singapore for taking action by imprisoning people guilty of laundering money from 1MBD as well as fined and closed down banks involved in the corruption.

Previously, Malaysia’s SP Setia, Sime Darby Property and the Employees Provident Fund (EPF) acquired the 42-acre Battersea Power Station site for £400 million (approx. RM2 billion) in June 2012. The first two companies each owned 40 percent, while EPF held 20 percent.

Then in January 2018, SP Setia and Sime Darby Property agreed to transfer ownership of the Grade II listed building (excluding the 42-acre site) to Permodalan Nasional and the EPF.

While the deal is in the process of being completed, the transaction price surpassed the £1.3 billion sale of the landmark Walkie Talkie building to Hong Kong food conglomerate Lee Kum Kee as the Battersea Power Station was acquired for £1.61 billion (RM8.8 billion), making it one of most expensive property transactions in the UK.

The Malaysian firms intend to build over 4,300 houses, as well as shops and office units, with tech giant Apple committing to relocate its UK headquarters to a 500,000 sq ft office there.

Although the mega project is expected to be fully completed by 2028, developers said in a letter to the borough council in 2017 that the cost of redeveloping the iconic power plant has soared from an initial estimate of around £750 million due the “substantially higher than originally envisaged” cost of removing asbestos there. Another factor that increased expenses is the complexity of restoring the chimneys and need for additional foundation works.

Image sourced from The Guardian

This article was edited by the editorial team of PropertyGuru. To contact them about this or other stories email editorialteam@propertyguru.com.my

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