Friday, January 19, 2018

What the Battersea deal says about PNB and EPF

Updates, Mon 22 Jan:
Did you know that Battersea was featured on the cover of Pink Floyd's Animals (1977), in the Beatles' film Help! (1975) and Alfred Hitchcock's Sabotage (1936), and in the BBC's Sherlock series and Dr Who? (Read Battering brickbats on Battersea). 

And why it's mischievous to say PNB and EPF to pay 1,000 times more for the Battersea project? 

Original article 
Malaysians buying properties in London isn't something that raises eyebrows these days. Members of our royalty, politicians (including Opposition politicians), businessmen (including pro-Opposition ones), and even some top-end journalists (including, er, never mind) - own properties in and around London.  
But PNB-EPF's purchase of Battersea Power Station is making headlines at home and abroad because it is no ordinary deal. And for the right reasons, too! The deal, the largest property deal in the UK, is proof of the good state of the two Malaysian institutions and, more importantly, their bold investment approach. As PNB says, the deal is part of it's long term strategy of portfolio diversification and judicious expansion into global assets. 
As a contributor to both EPF and PNB, I am both proud and excited. The detractors are working overtime to create doubts and negative perception about the deal. But they would have to discredit not just the Malaysian players but also the UK authorities behind the deal, too. And if Apple is making the landmark Battersea its home (read Apple London HQ will open at Battersea Power Station in 2021), who are they to say that Battersea is a poor choice for investment? 

Sent from my iPhone.


We refer to media articles relating to the proposed reorganisation of ownership in the Battersea Power Station project, as announced separately by S P Setia and Sime Darby Property to Bursa Malaysia on 18 January 2018.
  1. The Employees Provident Fund (EPF) and Permodalan Nasional Berhad (PNB) confirm that both have signed a Heads of Terms (HoT) with Battersea Phase 2 Holding Company Limited to initiate preliminary negotiations to purchase commercial assets in Phase 2 of the Battersea Power Station development for an estimated total consideration of £1.608 billion (equivalent to approximately RM8.76 billion). The HoT is a non-binding agreement and its terms will be subject to further due diligence and negotiations.
  2. EPF is part of the consortium of developers, consisting of S P Setia and Sime Darby Property in the greater Battersea Power Station development which began in 2012, with the entire development spanning Phase 1 to Phase 7. The EPF directly owns 20% of the Battersea Power Station development and the reorganisation exercise will not affect EPF’s shareholdings in the existing overall development.
  3. PNB, on the other hand, holds majority stakes in S P Setia and Sime Darby Property which jointly own 80% equity in the Battersea Power Station development.
  4. Phase 1 of the project, which comprises largely residential units, is already completed with 100% take-up rate and has been successfully handed over to the residential buyers in the last quarter of 2017, whilst the residential component of Phase 2 is almost 100% taken up. The initial capital invested into the project by the consortium of developers has also been reinvested into developing subsequent phases.

  1. The EPF and PNB are now contemplating to acquire ownership in Phase 2 of the project – known as The Power Station building – which is the anchor project consisting mainly of retail and office spaces. The EPF and PNB view this as a strategic opportunity to secure ownership of a unique and iconic real estate asset in a global city, which will be able to deliver a sustainable income stream into the future to meet their respective income needs.
  2. Phase 2 of the project is expected to be completed by late 2020 and has also been pre-let to anchor tenants such as Apple, one of the world’s leading technology companies, for a 500,000 sq ft tenancy – in one of London’s largest ever office pre- lets. This bodes well for potential investors, as it is seen as a precursor to an exciting future for the Battersea Power Station development.
  3. The purchase price, which is still subject to further due diligence, has been structured based on a completed and tenanted basis, to provide attractive long term yield for the investors.
  4. In line with its diversification programme of recent years, the EPF has been actively expanding its real estate and infrastructure assets both domestically and overseas to deliver long-term sustainable income for the benefit of its members. The proposed transaction is also in line with PNB’s Strategic STRIVE-15 Plan which outlines a long term strategy of portfolio diversification and judicious expansion into global assets.
  5. The EPF and PNB wish to reiterate that the decision to explore the potential reorganisation of ownership was purely an investment consideration initiated by the BPS Board and management team, together with the EPF and PNB, and was undertaken independently without any government intervention.
  6. EPF and PNB are steadfast and committed to uphold the trust of the two institutions’ members and unit holders respectively, as well as the Malaysian public, and any inferences that investment decisions are made for any other reason than for the benefit of the people are completely false and malicious.
Thank you.

Jointly issued by EPF and PNB 

Monday, January 15, 2018

Felda got back its land, KLVC to go as planned

Updates: :

I just want the land. We have never discussed stopping the project. The project is the project, the land is the land. I’m not questioning the development agreement. The development agreement is legitimate, FIC (Felda Invesment Corporation) had signed it, the (then) Felda chairman and the (then) Felda director-general had given the power of attorney in June 2014.- YB Shahrir Samad, Felda chairman in an interview with The Mole this morning, hours before the developer of the KL Vertical City (KLVC) project on the Felda's Jalan Semarak land returned the land titles to Felda. 

Read the full report h e r e

Friday, January 12, 2018

Black eye for a black eye: The real reason why Dr M failed to see Anwar Ibrahim in jail!

Dr Mahathir Mohamad said he had wanted to see Anwar Ibrahim to thank the jailed former Opposition leader for supporting his PM candidacy. I think the real reason the meeting didn't happen is because Anwar himself didn't want Mahathir as a visitor. As  Dr MiM suggests here, Anwar wouldn't want to be seen as subservient to Mahathir. Anwar would make sure he has total control over the outcome of any meeting with Mahathir. Anwar fully realises that Mahathir does not have any bargaining power here. 
The official reason, meanwhile, is simply that Mahathir didn't write in to the authorities to request visiting rights. Even YB Nurul Izzah, Anwar's daughter, has confirmed it, h e r e and you could see she wasn't particularly upset about the whole incident. 
YB Salleh Said Keruak told Mahathir even a convict's wife needs to formally apply to visit. "There are laws and procedures. As the Pakatan Harapan's PM-candidate, he should be the first to lead by example and not abuse his power or break the law. By doing so, he's only teaching the Malaysian people that if you are someone you don't have to abide by the law." (Perdana Menteri pun perlu mengikut undang-undang).

Wednesday, January 10, 2018

Mahathir: A Solusi or the Problemo?

Jan 10: The organisers of a forum tomorrow night to discuss the nation's fate if Mahathir Mohamad becomes PM again have agreed to add two more speakers to ensure a more balanced discourse. The two are Rais Hussin, who is the chief strategist for Mahathir's Pribumi party, and Hishamuddin Rais, former student leader. 
I wish they could include Perkasa chief Ibrahim Ali, who shocked many today when he slammed the Mahathir-Anwar alliance (Deciding on an ex-con to lead the country is a shameful act, says Perkasa president)), says Perkasa president). Perkasa has long been associated with Mahathir and Ibrahim was, until that statement, considered a Mahathir loyalist. 
I ask one of the organisers if they expect Mahathir to make a surprise appearance at the forum. "I hope he will."

Read also: Mahathir Solusi
Reformasi Untuk Mahathir oleh Seademon

Owh, so the Felda board knew all along?

Jan 10: By the end of their Day 3 today, the external auditors investigating Felda's on-going KL Vertical City project on the Jalan Semarak land (that was reportedly "lost", here) would have discovered that, contrary to some newspaper reports, the Board of Directors of Felda was fully aware of the multi-billion ringgit project, details of the land transfer, and the benefits and future income the project would bring.

According to The Mole (Felda land deal profitable, board had full knowledge) the Felda board met three times between 2014 and 2015 to endorse the deals between Felda subsidiary FIC and local Bumi firm Synergy Promenade Sdn Bhd, the master developer of the KLVC.

Construction on the KLVC started in 2016.

The Mole's exclusive:

KUALA LUMPUR – January 9, 2018: There’s another twist to the Felda Jalan Semarak land deal, with the latest information suggesting that the previous board members were fully aware of the deal between Felda Investment Corporation (FIC) and Synergy Promenade Sdn. Bhd. (SPSB).
On at least three occasions in 2014 and 2015, some among the Felda board who were also on the FIC board had met and endorsed the deal which promised the agency a minimum return of RM500 million.
The deal hogged the limelight after the Berita Harian last month published a report suggesting that the project to build the KL Vertical City there reeks of corruption.
According to the daily newspaper, all decisions pertaining to the June 2014 deal were made by FIC without the knowledge of Felda’s directors until they were informed about it in September of that year.
However, a source with intimate knowledge of the deal told The Mole today that the Felda board had endorsed it on the very day they were officially informed about the deal and then re-endorsed it on June 3, 2015.
The Felda board members then were Datuk Dr. Omar Salim, Datuk Seri Dr. Rahamat Bivi Yusoff, Datuk Norzirah Bahari, Datuk Mohd. Suhaili Said, Datuk Noor Ehsanuddin Mohd. Harun Narrashid, Datuk Abu Bakar Harun, Datuk Mohd. Khusairi Abdul Talib, Datuk Mohd. Isa Abu Kasim, Datuk Mohd. Emir Mavani Abdullah and Shamsudin Othman.
Ever since the Berita Harian report, Felda chairman Tan Sri Shahrir Abdul Samad has been pulling out all the stops to undo the deal although SPSB is said to have not found to have committed any breach of contract.
The source pointed out that the FIC-SPSB agreement was drafted in such a way that it is practically irrevocable, unless SPSB has breached it.
The exact wordings of the conditions for a breach are as follows:
“The parties hereto agree that FIC shall be entitled to terminate this agreement in the event the master developer fails and/or omits and/or neglects to complete the said project within ten years from the date of the first development order and the land conversion to the category of land use commercial, whichever is later.”
It is understood that Shahrir’s unhappiness stemmed from several seemingly lopsided conditions in the agreement which could result in Felda losing the land following the decision by the previous Felda and FIC boards to give SPSB  full power of attorney over the land.
While he did not discount the possibility of taking civil action against SPSB, Prime Minister Datuk Seri Najib Razak had late last month stated that the reports about Felda losing the land were inaccurate.
But Najib has also instructed an external audit firm to carry out a forensic audit on the project.
The Malaysian Anti-Corruption Commission (MACC) had also said that it found that the deal had no element of corruption.
Shahrir had portrayed the deal as a total loss for Felda but according to the source, FIC in fact is set to gain at least half a billion ringgit from it.
The source quoted the minutes of the 10th FIC board meeting on April 29, 2014, as such: “It was resolved that the company (FIC) do hereby accept the offer by SPSB on the proposed minimum guaranteed return (MGR) of RM500 million or 10 per cent of the gross development value, whichever is higher.
“The first payment of RM10 million being part of the MGR shall be paid within one month from the date of signing of the property development agreement.”
The estimated value of the land is RM200 million.