Another ‘top secret’ 1MDB bailout by 1MDB via TRX land buyback by the Ministry of Finance

During the last parliamentary session, I had asked the Minister of Finance what is the cost and size of the land in Tun Razak Exchange (TRX) which its wholly-owned subsidiary, Aroma Teraju Sdn Bhd acquired from 1MDB in 2015.

The reply which I had received from the Dato’ Seri Najib Razak on 31 July, was that the information was protected by a confidentiality clause between the buyer and the seller.

The answer is ridiculous because both entities are wholly-owned by the Ministry of Finance, which in turn is accountable to both the Parliament and the public at large, and hence such information should never be a secret. This is especially since the price of a piece of land is in no way a threat to national security, and the information is certainly not protected by the Official Secrets Act.

Therefore, for the current sitting, I had asked why the land size and price for the purchase of Tun Razak Exchange (TRX) land by MOF-owned Aroma Teraju from 1MDB cannot be disclosed even though both companies were wholly-owned subsidiaries of MOF.

Tony Pua minta Menteri Kewangan menyatakan apa sebabnya keluasan dan harga pembelian tanah Tun Razak Exchange (TRX) oleh syarikat Aroma Teraju daripada 1MDB tidak boleh diumumkan walaupun kedua-dua syarikat tersebut merupakan anak syarikat milik penuh Kementerian Kewangan

Once again, in the reply dated 6 November 2017, I received utter nonsense from the Finance Minister which justified his being awarded “Asia’s Worst Finance Minister 2016” by FinanceAsia.

Dato’ Seri Najib Razak responded by saying this was because of the agreement’s confidentiality clause to protect the commercial considerations of both parties. He goes on to say that these terms are consistent with the key terms used in the market among other similar transactions.

The Minister chose to ignore is that both Aroma Teraju and 1MDB are wholly-owned by MOF. What is the purpose of this secrecy when both parties in the agreement are owned by the Government?

There is only one reason for invoking this confidentiality clause, and it has nothing to with the purported “commercial considerations”. It is to cover up the fact that MoF paid over-the-top to buy back a fraction of the prime land it had sold at bargain basement prices to 1MDB in 2010.

Based on the 2011 1MDB Financial Statements, the 70 acre TRX land was acquired from the Government at the value RM194 million, or approximately RM64 per square feet in 2010.

However, in the same year that Aroma Teraju acquired the above-mentioned piece of land from 1MDB, the latter also sold other parcels of TRX land to other government related institutions.  Lembaga Tabung Haji acquired 1.6 acres for RM188.5 million or more than RM2,800psf.  Affin Bank, a subsidiary of Lembaga Tabung Angkatan Tentera (LTAT), acquired 1.25 acres for RM255 million or nearly an eye-popping RM4,700psf.

If Aroma Teraju paid any where near the prices paid by Tabung Haji or Affin Bank, it would mean that Malaysian tax-payers would be been ripped off beyond their wildest imagination.  Very simply, 1MDB purchased land from the Government at RM64psf and sold a fraction of the piece of undeveloped land back to the Government five years later at an exhorbitant thousands of ringgit per square feet.

I challenge the 1MDB, Arul Kanda or the Finance Minister to deny my allegations with facts and figures. Otherwise, it would merely confirm that the secrecy over a simple sales and purchase agreement between two government entities is really to cover up another one of the daylight robberies against the Malaysian tax-payers to bail out the debt-stricken 1MDB.