1Malaysia Development Bhd (1MDB) might be in for a rough time, as major investors from Qatar and Abu Dhabi might be pulling billions of ringgit out of two of the Federal Government’s development company’s projects, namely the Tun Razak Exchange (TRX) in Jalan Tun Razak and Bandar Malaysia in Sungai Besi.
MSN Malaysia cites a report by The Edge Financial Daily in which a source close to the matter cited 1MDB’s lack of transparency, lack of experience, and slow progress are making backers worried about the security of their investments.
“Investors from both Qatar and Abu Dhabi are reconsidering their positions in the TRX and Bandar Malaysia projects,” the source said.
Last April, 1MDB and its Abu Dhabi partner Aabar Investments PJS raised USD3 billion (RM9.7 billion) in capital to fund its projects from a private placement, which total RM18 billion.
The TRX project was the first to be undertaken by 1MDB’s joint venture with the firm, Abu Dhabi Malaysia Investment Co (ADMIC).
The Bandar Malaysia project in turn was propped up by the Qatar Investment Authority (QIA), which pledged an injection of USD5 billion (RM16.2 billion) – in exchange for first pick of land lots, before opening the rest to local developers.
Other investors in 1MDB’s two projects include Prudential with a USD500 million (RM1.62 billion) stake, and a Kuwaiti investor looking to set up a mega Islamic Bank in TRX. The Kuwaiti investor has since terminated its involvement.
One of TRX’s master planners, Akitek Jururancang, said the project had yet to see the start of major earthworks.
“There have been several changes to the master plan and this has caused delays to the project,” the firm’s spokesman added.
Kuala Lumpur mayor Datuk Seri Ahmad Phesal Talib told The Edge Financial Daily that there should not be any issues preventing the project from moving forward as all the necessary approvals have been issued for the TRX project.
“Earthworks for the basement were approved by the Kuala Lumpur City Hall (DBKL) last year,” he added.
Ahmad Phesal also confirmed that DBKL had yet to receive any application to start with Bandar Malaysia.
1MDB itself had not responded to The Edge’s queries on the matter at the time of writing.
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