KLIFD : Mystery Investor ?

To all the "mudah pelupa" folks I hope you can still remember the case of the two Punjabi greenmailers who cleaned out Khazanah of a few hundred million moolas over the hospital deals not too long ago.  Then over in Medini in Johor, some Arabs cleaned out the same Khazanah fellows of more hundreds of millions in the Medinii land flipping deals. 

Now there is yet another new opportunity developing to get screwed again. This one was called KLIFD.   Here be the news, from two sources. First from Sin Chew :

• KLIFD renamed Tun Razak exchange, task force to oversee development – Najib
• July 30 (Bernama) -- PM announced a special task force to oversee the development of the Tun Razak Exchange 
• led by Economic Planning Unit, members Finance Ministry, Bank Negara, Securities Commission 

further incentives 

• 100 per cent income tax exemption for 10 years
• stamp duty exemption on loan and service agreements
• Industrial Building Allowance and Accelerated Capital Allowance
• 70 per cent income tax exemption for five years at the Tun Razak Exchange.

xxx

• the exchange has a locked-in partner for the entire Phase 1.
• this international partner was the first mover in establishing a strong ecosystem to support the infrastructure for the exchange.
• "There will be a strategic investor who will be bringing in more than RM3.5 billion in foreign direct investment. ..
• special ceremony in September,  identity and details will be announced

• further growth on Islamic finance
• ..to participate in Malaysia's Islamic finance markets 
• global hub for Islamic Finance.
• Islamic finance, worth just US$5 billion in 1985, is worth more than US$1 trillion today.
• Malaysia's Islamic finance sector is already worth over US$400 billion 

xxxx

• The Tun Razak Exchange is a 28 hectare (70-acre), generate RM26 billion in gross development value.
• 250 of the world's leading companies at the exchange, 
• 500,000 jobs directly and indirectly 
• "40,000 will be knowledge workers specialised in financial services.."

Then here is The Star :

PM launches Tun Razak Exchange

• KUALA LUMPUR: About RM3.5bil in foreign direct investment is expected to be generated in the first phase of the development of the Tun Razak Exchange 
• 70-acre development off Jalan Tun Razak is also expected to bring in RM26bil in gross development revenue.
• 100 top global companies expected .to create a total of 500,000 jobs
• Entry Point Project catalyst for KL to be a leading global centre for international finance

Folks, let me ask you a simple question. Do you know how much groceries (sayur, ikan etc) is inside your fridge at home? I dont.  Nak manage your kitchen pun we depend on the orang rumah or nowadays on the maids. So  I  have much sympathy for the PM. He cannot do everything on his own. He has to depend on people.  It is the people around him who can make or break the PM. 

Which is why the PM must make sure that he surrounds himself with not only clever people (which has been a tough call so far) but more importantly the PM must surround himself with honest people, the Honest Abes. This has been a tougher call.  Its ok if they are not as smart, but they must be honest.   The best bet is to get smart and honest people. There are many of them but somehow they dont get picked. Hence from time to time the PM suffers embarrasment.

Whoever wrote the script on this Tun Razak Exchange is just going to make the PM eat more crow some day.  This is a multi billion Ringgit project : Gross Development Value of RM26 billion on just 70 acres. Minus say 30% of land for roads and infra (say 20 acres), the remaining 50 acres works out to about RM530 million per acre. Wow !! That is nine new Penang Bridges. Or the first part of the new 50 km MRT from Kajang to Sg Buloh. All crammed inside 70 acres.

Then they say 100 global companies are going to create 500,000 new jobs within this 50 acres of working space. Bolehke? Thats about the population of Petaling Jaya. That is over 10,000 new jobs per acre of land.  It will look something like this :  

Somehow I dont think this is going to happen. The trading room in this picture is about an acre in size. There are less than 1000 people in the picture. The whole Empire State building in New York with 102 + 2 floors houses only 15,000 workers.  That is an average of 150 workers occupying a floor space of about half an acre per floor.

And why the secrecy and mystery over the 'strategic investor'? Apa strategic sangat? This is nothing more than a land flip, nother property development. Big deal. Is the mystery investor  going to be another Arab? Please dont get screwed again ok. I think the investor is still a mystery because they have not sorted out the profit guarantees and the capital back guarantee.

In the 90s there were some strange Arab investors in Malaysia. They invested in Islamic financial houses and even a video tape manufacturing plant here. It turned out that many of them later appeared on the USA's list of terrorist financiers, Al Qaeda and stuff. I can point names and name fingers as well. Then we also had the nuclear parts for Libya caper remember. Those terror links were established by Slumberjack.

In the Medini fiasco the Arabs obtained "capital back" guarantees and minimum buy back prices for the land. In other words they could not lose. They dont have to take any risk. So I am just curious - will the mystery investor be getting the same type of "capital back" guarantees or minimum buy back prices at the TRX? Kalau macam itu tak payahlah cari mystery investor. Bagi kat orang buta yang main music di wakaf orang buta di Jalan Masjid India pun he can do a better job. 


This is nothing more than a real estate development. Big deal. So why the need to give :

• 100 per cent income tax exemption for 10 years
• stamp duty exemption on loan and service agreements
• Industrial Building Allowance and Accelerated Capital Allowance
• 70 per cent income tax exemption for five years at the Tun Razak Exchange.

What for? This is not some hi tech manufacturing project or Malaysia's first private rocket launch station where new technologies are being commercialised. This is going to be a huge building site, where the biggest beneficiaries will be the armies of Bangladeshi and Indonesian manual workers who will be brought in to build the project. Huge amounts of concrete will be poured at site.

Then the real estate flippers will market the floor space, the end financiers and the S&P lawyers all stand to make their cut. Why the tax exemption?