PETALING JAYA: PKR’s Wong Chen has called into question the need for the finance ministry to return the RM741 million deposit to a Malaysia-China joint venture (JV) following the collapse of the Bandar Malaysia sale deal, over the JV defaulting on its payment obligations.
He called the termination of the share sale agreement between TRX City Sdn Bhd and the JV, comprising Iskandar Waterfront Holdings (IWH) and China Railway Engineering Corp (CREC), “a commercial deal gone bad”.
“The finance ministry, by returning the deposit, sends a clear signal that the deal is terminated. I assume that the termination was done legally as most land transactions are clear cut on payment terms.
“So, what surprises me is that TRX City did not forfeit the deposit paid by IWH-CREC,” the Kelana Jaya MP said in a statement following a report in news site The Malaysian Insight today.
The report said IWH-CREC had also acknowledged receipt of the refund.
Wong suggested, however, that there were geopolitical concerns that may be at play here, especially with a few infrastructure projects in Malaysia being part of the One Belt, One Road initiative by the Chinese government.
“The politics makes things complicated as there are local political concerns as well as geopolitical concerns with China.
“One thing is clear, the handling of the entire episode shows that the Najib administration is not very cohesive. Mega projects in Malaysia are always riddled with vested interests and undue influences,” he said.
Wong, who is also PKR investment and trade chairman, added that China is learning that doing business with Najib is not going to be easy.
He also praised China’s governance and anti-corruption measures, which he believes will make them increasingly wary of how things are done in Malaysia.
On May 3, TRX City, which is owned by the finance ministry, said the agreement signed in 2015 with IWH-CREC had lapsed because the buyers “failed to meet the payment obligations”.
The deal involved IWH-CREC paying US$1.7 billion (RM7.41 billion) for 60% of the major Kuala Lumpur property development project.
The collapse of the deal led to questions being raised if China had a role in vetoing the agreement, thus stopping the release of funds for the JV to fulfill its payment obligations.
According to the Financial Times, it also raised broader concerns about the health of Malaysia’s relationship with China.
Previously, China was said to be expecting the KL-Singapore high-speed rail (HSR) project handed to them as part of the deal to develop Bandar Malaysia, where the main HSR stop will be located in the capital, FT said.