KUALA LUMPUR (May 31): Bank Negara Malaysia (BNM) has reiterated that the land it bought from the Ministry of Finance (MoF) located contiguous to the central bank’s Sasana Kijang complex here was agreed upon by both parties based on market price and supported by an independent private sector property valuation firm.

According to a statement posted on factwatch.my today, BNM confirmed that Suleiman & Co was appointed as the independent private sector valuer of the land known as Lot 41 on Aug 21, 2017 to determine the market price of the property.

It was responding to a daily that reported the central bank is believed to have overpaid for the land it had bought from MoF when it forked out RM2.066 billion for the 67.41 acres of land.

"The land size quoted in the article is inaccurate. As per BNM’s press release issued on Jan 4 on the purchase of land, it is stated that the size of land acquired is a total of 55.79 acres," said BNM.

In January, BNM had announced that the land will be utilised for the relocation of the Global Islamic Finance University and the International Shari’ah Research Academy for Islamic Finance. The land will also be used for future development of education and training facilities.

However, it has been noted that it was rare for a government agency like BNM to buy land from the Federal government and why the transaction was done at market price. At RM2 billion, the price of the 2,430,212.4 sq ft parcel works out to RM823 per sq ft.

On May 24, the MoF had confirmed that the former Government led by Barisan Nasional bailed out troubled 1Malaysia Development Bhd through funds raised from BNM's purchase of a piece of land for RM2 billion and a RM3 billion preference share issue by Khazanah Nasional Bhd.

Meanwhile, BNM said the use of the Jakel land sale as the market benchmark is not an accurate comparison as the land purchased by Jakel is located over 3km away, whereas Lot 41 is contiguous to BNM’s existing land and has 453,851 sq ft of functional built-up space in existing buildings.

On reports that BNM would have to pay a sizeable amount for conversion fees of the land which is categorised as agriculture, building or residential, the central bank clarified that there is no restriction on the land to be used for institutional purposes and hence no conversion of title is required.

"There is no restriction on the land to be used for institutional purposes, in particular for the financial education hub. The land status has been classified as ‘institutional’ under the KL City Plan 2020. Given this, no valuation adjustment is required. There are also existing buildings ready to be used on the land,” it added.

BNM also noted that given  former Treasury secretary-general Tan Sri Mohd Irwan Serigar Abdullah’s common directorship and conflict of interest in the matter, he had recused himself from all the central bank’s board of directors’ meetings and deliberations on the Lot 41 land acquisition.