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- "It should investigate the land sale at RM26.53 psf. Ten years ago, per square foot was RM45 and it was swampy land then. So have we been short-changed or [have we] short-changed ourselves?"
PRAI (Oct 10): The Penang government should indefinitely suspend the controversial RM646 million land sale in Batu Kawan Industrial Park 2 (BKIP2) to Sunway Bhd’s subsidiary Umech Land Sdn Bhd pending investigations or risk it becoming “very, very serious”, according to the state's former deputy chief minister (DCM) II Prof Dr P Ramasamy (pictured).
Ramasamy said exposure of the controversial land sale is akin to opening “Pandora's box”, and that the more Penang Chief Minister (CM) Chow Kon Yeow attempts to defend the sale, the more it becomes “indefensible”.
"As the Penang Development Corp (PDC) chairman, Chow must suspend the sale immediately. For one thing, it should investigate the land sale at RM26.53 psf. Ten years ago, per square foot was RM45 and it was swampy land then. So have we been short-changed or [have we] short-changed ourselves?
“Also, why is it that PDC, which was delaying the sale for so long, suddenly decided to sell it to Sunway? If they wanted to sell to Sunway, they should have done it. Sunway has projects in Penang. They are a bona fide Malaysian company. The more Chow defends this sale, the more it becomes indefensible," he added.
In a statement previously, Chow had responded to ongoing criticism by insisting that the deal was done above board and that due diligence was conducted. But he maintained that he was not aware of Sunway's involvement prior to PDC's signing of the joint development agreement (JDA) with Umech Land.
Ramasamy, a former board member of PDC — the state investment arm which sold 559 acres of PDC leasehold land to Umech Land — stated that he had “never heard” of Sunway’s interest during the “one and only sub-committee meeting” he attended on Nov 28, 2022, which was participated by Umech Construction Sdn Bhd.
Penang state had engaged in direct negotiations with Umech Construction, a Malaysian company it was introduced to at the Dubai Expo in 2020, during which Umech Construction expressed interest in the project, and assured of Middle-Eastern funding for it.
However, just two days before the deal was signed on Sept 27 this year, Umech Land, owned by the same shareholders of Umech Construction, was 70% acquired by Sunway's wholly-owned subsidiary Sunway Bukit Gambier Sdn Bhd for RM23.33 million.
Both PDC and Umech Land have entered into a JDA where Umech Land paid a deposit of RM64.6 million with the remaining RM581.42 million to be settled in four instalments. The proposed industrial park would consist of factories, industrial lots and commercial components with a gross development value of around RM3.5 billion, Sunway said in a Bursa Malaysia filing recently.
Raising a slew of questions on the deal during a press conference on Tuesday, Ramasamy, who was dropped by DAP from contesting the state elections in August, said he had doubts over Chow's denial of any knowledge of Sunway’s entry into Umech Land.
Ramasamy said it was permissible to have a deal struck via direct negotiation as long as the company can bring something beneficial to the table, for instance Aspen Group, which had brought in Swedish furniture giant Ikea, or Paramount Property Sdn Bhd, which had introduced a university project. But all Umech Construction brought was Sunway, he remarked.
“It is strange that Sunway’s name never cropped up in the November meeting with Umech Construction. They (Umech Construction board) too did not mention Sunway. PDC always told us it is Umech, and by that we understood it as Umech Construction, not Umech Land.
“The November meeting was only a fact-finding mission to know if the company had the financial capacity to fund the project. It was not about due diligence as Chow claimed. The committee also did not make a decision to sell to Umech, so it is wrong for Chow to say that the committee decided to sell the land to Umech or that we authorised the sale,” Ramasamy said.
A few days ago, Chow listed several occasions when the PDC board held meetings. Denying his involvement in any of the other meetings, which he called “kitchen meetings”, Ramasamy said he only participated in “one or two earlier discussions” pertaining to land application.
“No other meetings apart from sub-committee meetings can take decisions. Only the ones attended by Chow, DCM I Datuk Ahmad Zakiyuddin Abdul Rahman, state executive councillor Datuk Abdul Halim Hussain and Datuk Seri Lee Kah Choon, special investment adviser to the CM, and I — could make decisions at the time. But I think for Chow every meeting was about due diligence,” he said.
Ramasamy suggested that the land in question be used for public purposes as it was acquired from private landowners using taxpayers' money and should not be sold for profit-making to “friends or buddies".
“If the land was sold below market value at RM26.53 per square foot because it was difficult to sell, given its close proximity to the Pulau Burung landfill, then these challenges should be proven by the state.”
He observed that the surrounding land in the area is being sold at around RM80 per square feet, as the Penang Chinese Chamber of Commerce (PCCC), which has also questioned the sale of the land via a private transaction to Umech Land, has been quick to point out.
Expressing his frustrations at being “dragged” into the alleged PDC board decision by Chow, the 74-year-old, who held the DCM II post for three terms and sat as Batu Kawan Member of Parliament between 2008 and 2013, stressed that he wants to clear his name.
"I am not casting aspersions on Chow but I want to clear my name. I have known Chow for a long time, I expect him to do the right thing," he said.
During his tenure, Ramasamy was often reminded of Penang’s limited industrial land, so the opening up of the 1,235-acre BKIP2 in Seberang Perai Selatan district, an area formerly known as Byram, which housed a sprawling oil palm plantation and small villages, was a boon to the state as it was used to attract foreign investments.
“So, why was it sold without an open tender? Why was it sold to Umech Land when all the discussions were with Umech Construction? Why did Sunway acquire a 70% stake in Umech Land without fully informing the state, PDC and the local authorities? Is it true that the land was valued below market value as alleged by PCCC?” he asked.
Separately, Ramasamy said there should be a revamp of PDC, which he found to be a “lethargic elephant”, saddled by bureaucracy.
“This is probably why this might have happened. We don’t know what PDC had been advising Chow on the matter all this while,” he added.
Read also:
Aspen clarifies decade-old land buy from PDC ‘fundamentally different’ from Umech's BKIP2 deal
Penang CM says Lee Kah Choon replaced as PDC director a day prior to Umech Land exchange deal
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