Editor's note: This article was published on July 16, 2014
SPECIAL REPORT
Amid growing concerns over Forest City, an ambitious project to raise an island almost half the size of Putrajaya out of the Johor Straits, two more similar projects are also in the pipeline.
On Monday, Malaysiakini highlighted the Johor sultan's involvement in Forest City but his son, Crown Prince Tunku Ismail Idris, has also proven his business acumen with his involvement in the two reclamation projects, both carried out by Benalec Holdings Bhd.
Tunku Ismail's business empire is not solely confined to Johor.
In an announcement made in September last year by Singapore-based Rowsley Ltd to the republic’s stock exchange SGX, it was revealed that Tunku Ismail has become a substantial shareholder of Rowsley Ltd.
This came after he received a 12.78 percent stake in Rowsley Ltd, worth S$81.5 million (RM209 million) after selling 9.23 hectares of prime land in Johor Bahru, owned by Vantage Bay Sdn Bhd (VBSB), in which the crown prince had a 30 percent stake.
The sale of the land alone immediately saw the 30-year-old Tunku Ismail's wealth grow to rival the 50th person in Forbes' 2014 top 50 richest Malaysians list. The man ranked at no 50 on the list is Robert Tan, the property developer of the Mid-Valley City and Gardens Mall fame. He has a net worth of RM220 million.
S'pore billionaire's royal link
According to the announcements to SGX, the remaining 70 percent stake in VBSB is held by Singapore billionaire Peter Lim, who partly owns Rowsley Ltd.
Rowsley Ltd in its announcement said the 9.23ha land is located within Flagship A of Iskandar Malaysia.
"It is on a waterfront site, just a few hundred metres from Johor's new Customs, Immigration and Quarantine facility, making it highly convenient for Singaporeans to access due to its proximity to Singapore," said the statement.
This is not the first time the Singapore billionaire has been linked to the Johor royal family.
In March, Tunku Ismail's younger brother, 21-year-old Tunku Abdul Rahman ( left ) signed a memorandum of understanding with Soverus Group, also owned by Lim, to set up a premium security service for Iskandar Malaysia.
The deal raised eyebrows in Putrajaya, which has a policy against allowing foreign companies to control security firms in Malaysia.
Home Minister Ahmad Zahid Hamidi said any local security firm found to be directly or indirectly owned by foreign companies would have its licence revoked.
In Johor, Tunku Ismail has a stake in two reclamation projects, one on the southwestern tip of Johor, off the coast of Tanjung Piai, and another on the southeastern part of the state, along the Pengerang shore.
The Tanjung Piai reclamation project , at 1,410.3 hectares, will be almost three times the size of Singapore's Sentosa Island and will be located about two kilometres west of the Forest City site.
More reclamation projects
Located between the Forest City and Tanjung Piai reclamation sites are the Port of Tanjung Pelepas (PTP), the Tanjung Bin power plant and the Sungai Pulai estuary where large swathes of mangrove forest are located, and through which hundreds of fishing boats ply.
The Pengerang reclamation project is 712.3 hectares in area and like its Tanjung Piai sister, is intended to be a petroleum and maritime industrial park.
Two joint-venture vehicles were formed for these two reclamation projects - Spektrum Kukuh Sdn Bhd (SKSB) for Tanjung Piai and Spektrum Budi Sdn Bhd (SBSB) for Pengerang.
Benalec Holdings has the majority stake in both companies, at 70 percent, through its wholly-owned subsidiaries Tanjung Piai Maritime Industries Sdn Bhd in SKSB and Pengerang Maritime Industries Sdn Bhd in SBSB.
The Johor royalty holds the remaining stake, with Tunku Ismail owning 21 percent of the shares in both companies.
Another nine percent of the shares in both companies are held by Daing A Malek Daing A Rahaman, who is member of the royal court of advisers to the Johor sultan.
Tunku Ismail and Daing A Malek are also directors in both companies, according to a Companies Commission of Malaysia search done by Malaysiakini last week.
Multi-billion ringgit deals
The projects were announced by Benalec Holdings to Bursa Malaysia in 2012, in which it was revealed that Benalec Holding had entered into a development agreement with the Johor government.
Under the agreement, SKSB and SBSB will be given exclusive rights to reclaim the said areas and in exchange, the state government will receive three percent of the proceeds from the land sales.
An indication would be SKSB's sale of the 404.7 hectares of the 1,410.3-hectare Tanjung Piai reclamation area, the value of which has been reported to be in the range of RM2.5 billion to RM3 billion.
Benalec Holdings last March announced that SKSB was entering into a binding term sheet with the Johor State Secretary Inc and 1MY Strategic Oil Terminal Sdn Bhd to undertake reclamation of the 404.7-hectare area for the construction and operation of a crude oil and petroleum storage facility, with a private jetty included.
However, the Benalec projects have hit a snag over the delay in the environmental impact assessment (EIA) approval.
This delay was singled out by the Johor sultan in his speech at the start of the state assembly sitting on May 3, in which he complained about the EIA.
"An example is the land development project by Benalec, for which a memorandum of understanding was signed three years ago and witnessed by the prime minister himself, but to date still cannot get EIA approval," the ruler said.
Tomorrow, in the third of this four-part series, Malaysiakini will look at the royal family's sand extraction business, which stands to benefit from Johor's large-scale reclamation works in the Iskandar region.
JOHOR ROYALTY’S BUSINESS EMPIRE
Part 1: The case of Forest City and the Johor sultan
Part 2: Johor crown prince a top millionaire at age 30
Part 3: Of reclamation, sand and the royal company
