Mara faces RM88m loss for Aussie units

Dudley

PETALING JAYA: Mara stands to lose about RM88 million as its two properties in Melbourne have been put in the market for sale. Acquired at more than RM268 million two years ago, they are now in the market for just RM180 million.

Mara through its investment arm – Mara Inc – had acquired the assets and liabilities of a company called Thrushcross Land Holdings Ltd in 2014 which owned two students' hostels – Unilodge along Swanston Street and the Dudley International House.

In a Parliamentary answer in October last year, the rural development minister said that Mara acquired the Thrushcross for A$64.4 million (RM193 million) and undertook its liabilities of about A$22.5 million (RM67.5 million).

International property agents, Colliers have put Unilodge in the market and said it expects bids to be in the A$30 million (RM90 million) range.

Sources said Dudley House was expected to fetch the same price.

Unilodge

Documents which were made available to theSun suggest that Thrushcross and its shareholders – a company incorporated in the British Virgin Islands (BVI) – made a whopping profit of more than A$43 million (RM129) in just flipping these two properties to Mara Inc by selling the company.

Thrushcross had bought Unilodge on Swanston Street for A$23.5 million (RM70.5 million) on Jan 16, 2013 while Dudley House was purchased for A$22.6 million (RM67.8 million) from yet another outfit controlled by Malaysian interests – Wanissa Properties Pty Ltd and PMCD Investments Pty Ltd on July 25, 2013.

The directors and shareholders of Thrushcross at the time of incorporation and until it was acquired by Mara were Datuk Mohd Lan Alani and Datuk Abdul Halim Rahim who were then chairman and CEO of Mara Inc respectively.

Erwan Aziz and Izmir Abdul Hamid were appointed as directors on Dec 11, 2012 but their tenure ended on Feb 20, 2013. On the same day, Datuk Mohd Fathil Daud, who is still listed as a director of Mara Inc came on board as director of Thrushcross. (Erwan and Izmir signed the sale and purchase agreement for Unilodge eight days after their appointment and ceased to be directors two months later.)

The annual financial statement of Thrushcross for the financial year ended Dec 31 2013 listed the value of Unilodge as A$43 million (RM129 million) with a "revaluation gain" at A$2million (RM6 million). It also lists the acquisition cost of Dudley House at A$24 million and a "revaluation gain" of A$2.9 million (RM8.7 million).

However, the same document lists as liabilities, the company's borrowings from WBC Finance as A$2.5 million (RM7.5 million) and WBC Commercial Bill at A$20 million (RM60 million). The note to this transaction says: "The WBC Finance and Commercial Bill facilities are secured against both the Swanston Street and Dudley House properties and A$1million short term cash deposit. Interest rate for WBC Finance is 9.03% and interest for WBC Commercial Bill is 4.48% plus 1.55% line fee."

Last week, Mara chairman Tan Sri Annuar Musa confirmed that the "old management" had a short-term loan with an Australian bank repayable which he described as "impossible to pay within three years". Mara has replaced several of its directors and has made changes to its management team.

He told reporters after lodging a report at the Malaysian Anti-Corruption Commission: "We do not want to see this loan issue being prolonged. So we are working out a new loan or financing arrangement with a Malaysian bank."

It has now emerged that Australian authorities are also seeking stamp duties from Mara in connection with the sale of the properties and capital gains tax from both Abdul Halim and Lan Alani.

All parties, it is learnt, contended that the transactions took place in the BVI but Australian laws dictate that where ownership of land is transferred to another party, the tax needs to be paid. It does not matter that the purchase was for shares when the intention was to transfer the properties subsequently and hence both Mara Inc and its directors are liable for the stamp duties.