An unknown property buyer allegedly netted a profit of A$9 million (RM26 million) in just six months by selling a Melbourne office building to Mara Inc Sdn Bhd, Pandan MP Rafizi Ramli claims.
Going by Mara documents leaked to him last week, Rafizi said, the Mara Council approved the purchase of the property at 333, Exhibition Street for A$31 million (RM89.7 million) on Feb 21, 2013, with the acquisition being done on March 29, 2013.
However, the Australian company Quintessential Equity had, just six months earlier in October 2012, sold the same property to an unnamed buyer for A$22 million (RM63.7 million).
According to a report by the property company, it entered into a sales contract with the buyer at that time, and the contract was settled in early February 2013.
Quintessential had earlier bought the office building for A$17.5 million (RM50.6 million) in March 2011, and then renovated it before making the sale.
“This clearly proves that the purchase of 333 Exhibition Street involves the same method as Dudley House, where the price paid by Mara Inc is far higher than the market price,” Rafizi told a press conference today.
Property purchases in spotlight
Mara’s property purchases in Melbourne has been under the spotlight since last week, when Australian newspapers claimed that one of them, Dudley International House, was purchased at an inflated price, the excess of which was channelled back to Malaysia as kickbacks for Malaysian officials.
Mara’s two other properties are 746, Swanston Street and 51, Queen Street. All four were acquired between 2012 and 2013.
Dudley House and 746, Swanston Street are student flats, while 333, Exhibition Street and 51, Queen Street are office buildings in the Melbourne central business district (CBD).
The allegedly leaked documents - a page of which had been distributed to the press - show that the four properties were purchased for a total of A$117.4 (RM 339.7 million at current exchange rates, or RM375.4 million in the exchange rates used in the document).
Malaysiakini has contacted Mara chairperson Annuar Musa for comment regarding Rafizi’s allegations. He merely replied that he will be holding a press conference on Thursday.
Thus far, Malaysiakini is unable to independently verify the veracity of the supposedly leaked documents, from which Rafizi had distributed a page yesterday and another page today.
It comprised of presentation slides supposedly shown to Annuar at a briefing at his official visit to Melbourne in May last year.
Based on the documents, the initial rental yield for the four properties range from 5.5 percent to 6.1 percent, while the five-year average yield is expected to range from 6.02 percent to 6.7 percent.
'Inflated prices'
Pointing to property market reports however, Rafizi, who heads the group National Oversight and Whistleblowers (NOW) said this is below the market average and therefore, Mara should not have made the investment.
He said a sound investor would have at least gotten an investment that would at least provide the average market returns.
He speculated the reason for the lower yield is the result of all four properties being bought at inflated prices.
“You cannot buy something that has below-market returns. If you know something has below-market returns and you bought it anyway, it shows whoever approved it is either negligent, stupid, or had been bribed,” he said.
He said an article dated June 2, 2012 by the Property Observer said that the average yield for Melbourne CBD offices range from 6.5 to 7 percent.
In September 2013, the Melbourne City Council published a report stating that the rental yields for CBD offices in second quarter of 2013 range from 6.5 percent to 9 percent, depending on the classification.
Rafizi (photo) said Mara’s properties would have been considered A-Grade or B-Grade properties, corresponding to a yield of 7 to 7.5 percent or 8 to 9 percent respectively.
In contrast, the documents indicate that the initial yield for the 333, Exhibition Street office is 6.2 percent, with a five-year average of 6.7 percent.
Meanwhile, the office building at 51, Queen Street supposedly has an initial yield of 6.1 percent and a five-year average yield of 6.4 percent.
'Focus on solving Mara's problems'
Turning his attention to the Mara chairperson’s response to Rafizi’s allegations yesterday, Rafizi said Annuar should not be arrogant and focus and solving Mara’s problems.
He said he has received numerous complaints about Mara, such as students being unable to obtain loans from the agency that was set up improve economic opportunities of the Bumiputera.
“He (Annuar) has a bigger responsibility. He has to answer how can he allow this to happen – Mara not making sufficient returns on the money; Mara paying a lot more, almost RM50 million over market price.
“Because it’s public money. That RM50 million that was given to the crooks should have been given to poor students, poor entrepreneurs, for whom Mara was set up in the first place,” he said.
Rafizi, who is also the PKR vice-president, had claimed yesterday that Mara’s four Melbourne properties are either owned through a company based in tax haven the British Virgin Islands, or through a series of intermediaries in several countries.
Annuar had shot back at Rafizi’s allegations later that day, saying that it was nothing new, and questioned Rafizi’s motive if he was more interested in seeking publicity or in seeking justice.
