Highlights Nothing political about land deals

Highlights Nothing political about land deals
Business & Markets 2013
Written by Kathy Fong of theedgemalaysia.com
Tuesday, 09 April 2013 09:09


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KUALA LUMPUR: BOUSTEAD HOLDINGS BHD [] defended its controversial acquisition of three parcels of land in Bukit Raja measuring 200 acres (80ha) from companies aligned to Selangor Wanita Umno chief Datuk Raja Ropiaah Raja Abdullah and carpet dealer Deepak Jaikishan stating that it was commercially driven.

Boustead deputy chairman and group managing director Tan Sri Lodin Wok Kamaruddin said its major shareholder Lembaga Tabung Angkatan Tentera (LTAT) should be happy with the transaction, which was done at RM160 million cash, and that there was nothing political about it.

“There is nothing political about it [land acquisition]. We look at what value it can give to the group,” Lodin told a press conference after the Boustead AGM yesterday when asked about the rationale for the Bukit Raja land purchase which had come under criticism.

In a deal broken into two segments, the land was purchased from Astacanggih Sdn Bhd, a company linked to Deepak and Awan Megah Sdn Bhd, which is controlled by Raja Poopiah for a total of RM160 million.

“Boustead is a public listed company, we are under the regulation of the authorities, such as the Securities Commission and Bursa Malaysia. Whatever we do we must be in line with the regulations,” explained Lodin when commenting on the perception that the land purchase had lacked transparency.

To a question about whether the armed forces was unhappy with the acquisition, Lodin said, “The land purchase is to get a better return for shareholders, including LTAT which owns a 61.47% equity interest.”

“We did not request for financing from shareholders. The land purchase was financed by profits made from the property division and borrowings …I don’t see why LTAT would be unhappy with the proposed land purchase,” said Lodin, who is also chief executive of LTAT.

In December last year, Boustead announced that its wholly-owned unit Bakti Wira Development Sdn Bhd had bought an 80% equity interest in Astacanggih for RM30 million cash. In the second part of the acquisition, Bakti Wira together with Astacanggih bought three parcels of land from Awan Megah for RM130 million cash.

Lodin stressed that Boustead had to buy an equity stake in Astacanggih in order to pave a way for the purchase of the tracts near Bukit Raja as the latter had some “development rights” over the land.

He pointed out that Boustead had got itself a bargain by paying RM18.37 per sq ft compared with a market value of RM22 psf that an independent valuer has pegged the land at.

The transaction came at the time when Deepak, said to be well-connected, had publicly alleged several deals that he had to undertake for those in the ruling party. It was seen as a way to silence Deepak who has a 18.99% stake in Astacanggih.

Awan Megah, reported to be 99.99% owned by Raja Ropiaah, was awarded three plots of land measuring 223 acres in Bukit Raja, Klang in exchange for building the National Defence Education Centre (Puspahanas) in Putrajaya in a privatisation agreement.

Astacanggih had helped Awan Megah with some financing facilities for the privatisation to take off. In return, Astacanggih was to get a portion of the land for development.

But Deepak through Astacanggih had sued Awan Megah for the rights to the three parcels of land in Bukit Raja, Klang after a business partnership between the two companies went sour.

Astacaggih withdrew the legal case shortly before Boustead’s announcement about the land purchase in late December.

Also, just one month before Deepak sealed the land acquisition deal with Bousetad, the businessman had threatened to sue the prime minister and several ministers for cancelling government contracts awarded to him.

Deepak had held a press conference in late November last year saying that his business ventures had been affected as several contracts awarded to his companies have been cancelled and postponed.

They included a 20-year concession to build and operate 16 1Malaysia Mara hostels overseas worth RM2 billion.

“We are looking at taking action against the authorities. I will sue the ministers and the head of Cabinet that have terminated my contracts,” Deepak had said during the press conference.

Deepak came into the limelight when blogger Raja Petra Kamarudin revealed last April that he had played a key role in arranging for a controversial second statutory declaration by private investigator P Balasubramaniam who has passed away.



This article first appeared in The Edge Financial Daily, on April 9, 2013.