As a result, Urban Wellbeing, Housing and Local Government Minister Abdul Rahman Dahlan said that Penang Chief Minister Lim Guan Eng ought to provide proper answers to several questions.
“After my exposé in parliament recently, the Penang Chief Minister denied the land had been sold to a third party,” Rahman noted. “But what he did not disclose is that the land is now held by KLIDC and the sale of the shares of KLIDC has the same effect of selling the land too.”
The Minister added that in any standard government project and privatisation agreement, the sale or change of ownership of a company which has been awarded with a project must be duly notified and approval must be obtained from the state government before such sale of shares can take effect.
“Did the Penang State Government notify of the sale of this project in Nov 2015 and subsequently give the approval,” he asked, “or was this standard term deleted in the agreement between the state government and KLIDC?”
On March 23, Rahman told Parliament that he had uncovered evidence suggesting that land previously designated for the second phase of an affordable housing project in Taman Manggis had instead become the subject of a sub-sale transaction between the Kuala Lumpur International Dental Centre (KLIDC) and a third party.
“Today, I have before me duly signed and stamped Sale and Purchase Agreements dated 11 November 2015 in respect of the land,” he announced, adding that due to the inter-connected nature of the transactions involved, the documents involved ought to be taken legally as one making up an agreement.
“The purchase price for the sub-sale transaction is RM70,643,628,” the Minister claimed, saying that it involved:
The sale of Kuala Lumpur International Dental Centre Sdn Bhd (KLIDC) for RM18,643,628; and
The sale of Victoria International Medical Centre Sdn Bhd (VMC) for RM52,000,000.
Rahman named Tang Yong Chew and wife as the owner of all three companies involved – KLIDC, VMC and Tang Renewable Energy Engineering (TREE). He said that TREE, in which the Tangs were majority-owners, were the vendors in the VMC sale.
“When read simultaneously, the two agreements appear to effect the sale of the medical centre and hotel project with the core asset being the land at Taman Manggis,” the minister told the media.
According to Rahman the land in question had been originally sold by the DAP-led Penang government to KLIDC on June 16, 2010 under a controversial Request For Proposal (RFP) process at RM11,552,208.00 or at RM232 per square foot, which many believe to have been grossly lower that the market value at the time.
Two months later, VMC came into being, and in July 2011, entered into a joint venture agreement with KLIDC to develop the land.
“This project [was] subsequently resold to a third party five years later [at] RM70.6 million, a projected profit of RM59 million [despite] the core project remaining undeveloped,” Rahman alleged.
He said that at face value it appeared that land previously allocated for public housing to benefit the poor had been sold to a private company allegedly at an under-priced value, without noticeable physical works despite almost six years having passed since its award.
The minister said that he would be forwarding the sale and purchase agreements along with other documents his team has uncovered to SPRM and PDRM, adding that he hoped the documents would assist them in their investigations.
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