PDC’s land sale to Umech Land
The land was sold at RM26.53 per sq. ft, apparently the price of raw land, land without basic infrastructure what is more near the massive landfill in Byram.
Information from reliable sources indicate that the land value in Byram is around RM80 per sq. ft. It apparently never crossed the minds of those in the PDC that there is a flip side to investors locating their companies near landfills for obtaining carbon credits.
Industrial land is lacking very much in Penang, this is one of the main reasons why Penang is not able to attract foreign investments. Instead, foreign and local investors might be looking at other states with ready availability of land.
In this respect, PDC is under pressure for more industrial lands to be made available to the prospective investors. It was this in mind that PDC participated in the Dubai Expo in 2020 to attract investors to Penang.
At the Expo, PDC identified a company called Umech Construction Sdn Bhd with sufficient financial backing to buy and develop industrial land in Penang particularly in the Batu Kawan Industrial Park 2 (BKIP2) located in the Sebarang Perai Selatan (SPS) area.
Even though PDC negotiated with Umech Construction, the above land was ultimately sold to Umech Land. Umech Construction and Umech Land could be two different legal entities but with similar shareholders.
A few days before the signing of the sales agreement, 70 percent of Umech Land shares were acquired by Sunway Bhd.
I understand that the funds for the purchase of the land will come from Sunway”s investment. Umech paid a deposit and the balance will be paid in four yearly instalments.
It is strange that the name of Sunway never cropped up in the earlier discussions in PDC about the land sale to Umech Construction.
Moreover, as pointed out by the Penang Chinese Chamber of Commerce (PCCC) Umech Land did not have the financial strength as reported by CTOS.
The first salvo against the sale of the land to Umech Land was fired by the PCCC. It raised questions pertaining to:
● why the former land owners cannot resort to legal action as the sold land was came compulsorily acquired.On October 3, 2023, the Chief Minister of Penang and the chairman of PDC Chow Kon Yeow gave an explanation to the questions raised by the PCCC. Chow’s explanation included the following:
● the buying of shares by Sunway was done before the land sale was effected. PDC has been asked to seek clarification on the matter
I was named as the member of the PDC’s sub-committee along with three others, all members of the PDC board. The chairman of the sub-committee was Chow, the chairman of PDC.
The meeting was not about engaging in due diligence but about getting more information about the company.
Issues such as the financial capability of the company, the need for market survey, and others were raised. The sub-committee did not recommend that the PDC land be sold to Umech.
It was wrong on the part of Chow to have said that the decision to sell the land to Umech was based on the recommendations of the sub-committee.
The sub-committee made no recommendations, but merely wanted more information from Umech on industrial land development.
It is with much regret that I and others have been dragged into the present controversy unnecessarily to endorse the decision of the PDC to sell the land to Umech.
While I was privy to the one or two PDC board meetings that discussed the land application by Umech, it was at the preliminary stage.
It is essential that the Penang state government or the chief minister Chow should clarify the exact role of the sub-committee and not give the inaccurate and false impression that it endorsed the move to sell the said land to Umech.
Anyway, much water has passed under the bridge since the land sale agreement was concluded between the PDC and Umech Land.
I think that in the larger public interest, the land sale to Umech Land by PDC should be temporarily suspended pending further investigation. The following are the grounds for suspension.