BNM probes deep into disputed RM2bil land purchase

KUALA LUMPUR: Bank Negara Malaysia (BNM) is drilling down on details of how the central bank entered into a controversial RM2bil purchase of a piece of land from the federal government in January this year.

Towards this end, four senior officers alleged to be involved in the transaction have gone on leave pending the completion of an internal probe into the matter.

It is learnt that the four, including an assistant governor, went on leave from last week as Bank Negara probed the purchase of the 55.79-acre land, which is located next to the central bank.

An independent party has been roped in to review the processes and come up with its findings.

“The review is still ongoing. To facilitate the internal review, relevant officers of BNM have opted to take a leave of absence,” it said in a statement yesterday.

Earlier, there was speculation that the Malaysian Anti-Corruption Commission was conducting an investigation, but a highly-placed source in the anti-graft body said it was actually the central bank’s internal inquiry.

“The officers are not on leave because of any investigation on our part,” the source said.

The source, however, declined to reveal whether investigators were still probing the land purchase.

The controversy came about in January after BNM made an announcement about the land acquisition for the development of a financial education hub.

It had said that the land valuation was mutually agreed on between BNM and the government based on a valuation process conducted by an appointed independent private sector valuer.

Questions were raised about the purchase price, as the central bank was deemed to have overpaid for the land, on which an institution of learning is to be built.

The RM2bil price tag for the land was only if the parcel was to be developed into commercial buildings. But in BNM’s case, it was not for commercial reasons, hence the contention was that the price should have been lower.

The land transaction can be traced to 2016, when BNM first expressed its intent to buy the parcel at a nominal price.

Hartanah Mampan Sdn Bhd – a special purpose vehicle of the Finance Ministry – which sold the land to BNM, was incorporated on Oct 19, 2017.

Former Treasury secretary-general Tan Sri Dr Mohd Irwan Serigar Abdullah was one of Hartanah Mampan’s four directors.

Shortly after Pakatan Harapan defeated Barisan Nasional in the May 9 polls this year to form the new government, Finance Minister Lim Guan Eng revealed that BNM and the government’s strategic investment fund Khazanah Nas­ional Bhd made payments to the Finance Ministry which were then used to service 1Malaysia Deve­lopment Bhd’s (1MDB) debt obligations.

These involved the purchase of land by BNM and the redemption of redeemable shares by Khazanah totalling RM1.19bil.

Meanwhile, in response to a report by StarBiz which broke the story of four BNM officials going on leave pending the investigation, Prime Minister Tun Dr Mahathir Mohamad said someone in BNM “obviously knew” what happened to the proceeds of the land purchase.

“I only know that the land was sold to BNM for RM2bil. What happened after that, I don’t know. Where the money goes, I don’t know.

“But obviously somebody in BNM knows about it. They are investigating. That’s all,” he told a press conference here after launching Industry4WRD, the national policy on Industry 4.0.

Former BNM Governor Tan Sri Muhammad Ibrahim stepped down in June, supposedly over the controversial land purchase.

In a parting message to the central bank staff, Muhammad said BNM would never be party to activities that betrayed public trust in the institution.

“We abhor any semblance of corruption and abuse of power.

“Sceptical as many may be, the bank did not know nor did we have any control over the proceeds of the land purchase that would be used to settle 1MDB’s obligations.

“It is simply unthinkable for us to be associated with such a controversial entity mired with accusations of fraud and mismanagement.

“It is not in our nature to do such things. We even took enforcement action against them earlier,” he wrote.