KUALA LUMPUR (Oct 15): The Penang government or Penang Development Corp (PDC) should cancel the land deal with Sunway Bhd’s 70%-owned subsidiary Umech Land Sdn Bhd, as more questions and queries are coming to the fore on the transaction, former Penang deputy chief minister II Professor Dr P Ramasamy Palanisamy said.
“I suggest that both PDC and the Penang government undertake the unpleasant task of cancelling the land deal with Umech Land. It is simply not worth pursuing the present land deal that threatens to put to shame all the good work done by the Penang government for the last 15 years,” he said in a statement on Sunday.
On Sept 27, Sunway announced that Umech Land had inked a joint development agreement with PDC to co-develop a 558.96-acre (226.20-hectare) parcel in Byram, Seberang Perai Selatan in Penang, near Batu Kawan, into an industrial park dubbed Batu Kawan Industrial Park 2 (BKIP2), with a gross development value of around RM3.5 billion.
“Once cancellation is done, action should be taken against those individuals whether in PDC or in the state government or outside responsible for this shoddy mess,” said Ramasamy, who is a former board member of PDC.
He suggested that rather than selling raw land to private investors, PDC should then develop the land itself. “By doing this, PDC can return to its core activities.”
Ramasamy also said he stands by his earlier comments that there was no approval given by the PDC board for the sale of the land to Umech Construction Sdn Bhd. “As long as I was in PDC, there was no decision made to approve the land sale to Umech Construction.”
Nevertheless, he conceded that he is not in the know over what transpired in PDC in the last few months up to the signing of the sales and purchase agreement (SPA) with Umech Land after ceasing to a board member.
“This is why in the interest of transparency and accountability, the actual date of the approval of the land sale must be made known — in other words, the date of the PDC board meeting that gave the approval.
“Not only this, why was there the switch from Umech Construction to Umech Land, and why [did it happen] two days before the SPA [was signed]? Sunway was brought in to hold 70% of the shares in the buyer, Umech Land. Umech Construction and Umech Land might be two different companies, but with the same shareholders,” he said.
Ramasamy also raised questions over Umech Land’s financial strength. “PDC was convinced that it (Umech Land) had the financial strength to develop the industrial plots in Byram. If this is so, why [did Umech Land] bring in Sunway in the first place?”
“I am sure the PDC management must have been aware of these developments. Was critical information withheld in the PDC board meetings? Was Chow (Penang Chief Minister Chow Kon Yeow) fully apprised of the financial standing of Umech Land?” he asked.
Companies Commission of Malaysia data showed that before Sunway acquired the 70% stake in Umech Land for RM23.33 million on Sept 25, two individuals — Karen Cheng Pei Kwan and Nathaniel Rajakumar — were the shareholders of the company.
Umech Land is now 70%-controlled by Sunway’s wholly-owned subsidiary Sunway Bukit Gambier Sdn Bhd. The remaining 30% stake in Umech Land is held by Cheng (21%) and Rajakumar (9%).
“Anyway, it is not too late for PDC and the state government to put an end to this land sale,” said Ramasamy.
“I am sure that there are provisions in the SPA that would allow PDC to come out of the deal, provided that Umech Land did not divulge the full details of the requirements of PDC in effecting the land sale,” he added.
“Land for industrial development is a scarce commodity in Penang. PDC is under tremendous pressure to make industrial land available for foreign and local investors. It is the lack of industrial land that is one of the main reasons why investors are seeking greener pastures for the availability of land in other states.
“Thus, given this land scarcity, there is no excuse for PDC not to have transparent dealings with investors and land purchasers. This is not to forget that the land that was sold to Umech Land was acquired property of PDC. In other words, land taken under compulsory acquisition is meant for public purposes,” said Ramasamy.