This article first appeared in The Edge Malaysia Weekly on October 2, 2023 - October 8, 2023
Last week, Sunway Bhd announced that its 70%-owned unit Umech Land Sdn Bhd had signed a joint development agreement with Penang Development Corp (PDC) to co-develop a 558.96-acre parcel in Byram, Seberang Perai Selatan, Penang.
The industrial project, dubbed Batu Kawan Industrial Park 2 (BKIP2), is expected to fetch a gross development value of at least RM3.5 billion over an eight-year period.
PDC, as proprietor of the land, will be entitled to a land entitlement of RM646.02 million — an amount that was “derived from negotiations” with Penang’s development arm based on the market price in the vicinity of the land.
While Sunway appears to have got a good deal to develop a new industrial park in Batu Kawan, which has proved to be a well-sought-after location by both local and international investors, one can’t help but wonder who is behind Umech Land.
According to Sunway’s filing with Bursa Malaysia, its wholly-owned Sunway Bukit Gambier Sdn Bhd controls a 70% stake in Umech Land. The remaining 30% is owned by two little-known individuals, namely Cheng Pui Kwan (21%) and Nathaniel Rajakumar (9%).
However, there was no record of Umech Land being a subsidiary of Sunway in the latter’s 2022 annual report, which was published on April 28 this year.
Assuming that Sunway’s investment in Umech Land only occurred in the past five months, how the local conglomerate secured the land deal with PDC has certainly piqued interest. It would be interesting to find out how much Sunway paid for the 70% stake in Umech Land too.
After all, Sunway has many property development subsidiaries in its stable. If PDC favours Sunway as its partner, why choose Umech Land in particular?
Had Umech Land initiated negotiations or even struck a deal with PDC before Sunway’s involvement? There are some questions that need to be answered.
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