1MDB’s Air Itam Land Sold Secretly For RM2.7bil To Cayman Islands Firm Despite Freeze

31 Jul 2018


Finance Minister Lim Guan Eng revealed that the previous Federal Government secretly sold 1Malaysia Development Bhd’s (1MDB) land in Air Itam, Penang for 4.25 billion yuan (RM2.7 billion), reported The Edge.

It was divested in August 2017 to Cayman Islands-based Silk Road Southeast Asia Real Estate, giving the seller a net profit of RM1.32 billion, given the property’s original purchase price of RM1.38 billion.

More importantly, the sale was carried out despite the Penang State Government’s moratorium on transactions involving the said land. The deal also went unnoticed as it was done through an agreement to transfer the entire shares of the land’s owner 1MDB’s unit My City Ventures to Silk Road.

“Although the full proceeds from the disposal of My City Ventures have been received by Minister of Finance Inc’s wholly-owned subsidiary Sentuhan Budiman Sdn Bhd (SBSB), the transfer of shares to Silk Road has yet to be completed.”

“To date, SBSB has yet to receive any application from Silk Road to have the shares transferred,” said Guan Eng in response to a query from Bukit Bendera MP Wong Hon Wai on 19 July.

According to a financial expert, he suspects the sale to be a case of money laundering as Silk Road did not immediately ask for the transfer of the shares even though it has already paid the RM2.7 billion.

“Why do you throw so much money and don’t ask for the transfer of titles? The obvious answer is money laundering,” said the source.

At present, the authorities are investigating allegations that the money used to buy the land came from funding for two gas pipeline projects with a combined cost of RM9.4 billion that was awarded to China Petroleum Pipeline Bureau on November 2016.

Both have been issued stop work orders and are currently being probed by the authorities as 88 percent of the funding has been disbursed but only 13 percent of both projects have been completed.

In particular, there is suspicion that that the money came from China Exim Bank, the lender for the two gas pipeline projects, before it was secretly transferred to an Arab stockholder of Silk Road. Subsequently, it was returned to Malaysia where it was used to pay for the Air Itam land, and later used to service part of 1MDB’s US$3.5 billion debt to International Petroleum Investment Co (IPIC).

“Silk Road did not care about the land because it was not their money anyway. There is no money trail evidence but it is quite obvious (that it’s money laundering),” added the source.


Image sourced from Edge Property


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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