Mara Melbourne building purchase overvalued by Malaysian firm, says report

PETALING JAYA (Jan 28): The controversial purchase of the UniLodge building in Melbourne by Mara Incorporated Sdn Bhd was based on bloated valuations by the Malaysian branch of Raine and Horne, reported the Sydney Morning Herald (SMH).

The property was transacted by its seller Australian businessman Lionel Harber at A$23.5 million (RM73.82 million) to an agent from an offshore company, who subsequently sold it to Mara Inc for A$41. 8 million mere weeks later – just over A$1 million short of the A$43 million valuation by Raine and Horne’s Kuala Lumpur office.

The building, comprising 280 rooms which are mostly leased out to international students, is on Swanston Street near Melbourne University.

According to SMH, Farber said the sale price was in line with fair market value, supported by an independent valuation.

Raine and Horne’s valuations were used to justify the resale of the building, said the publication.

According to SMH, Mohammad Lan Allani – a former assemblyman from Sabah – was the chairman of Mara Inc when the inflated valuations were requested.

The publication reported that Mohammad Lan received A$3.2 million in his personal bank account shortly after payment was made.

However, he claims to not remember making the deal, saying that he was involved in setting up offshore companies in tax havens as a “convenient” way to sell properties owned by the government.

Meanwhile, Raine and Horne’s Australian headquarters said while the Malaysian office pays a fee to use its name, it is run by local managers.

"Local investigations ... concluded no impropriety was found under the terms of that investigation," said Raine and Horne Australia, adding that the Malaysian office had called the A$43 million valuation appropriate.

The UniLodge building is but one of other questionable deals made in connection with the Malaysian government – SMH said there were at least three other transactions worth about A$75 million, including the A$22 million acquisition of Dudley House in the south of Melbourne was reportedly inflated by A$4.75 million.