KUALA LUMPUR (Oct 17): Opposition lawmaker Rafizi Ramli has alleged that the Federal Land Development Authority (Felda) had overpaid approximately RM180 million (about £30 million) for the £95.65 million (RM538 million) purchase of Grand Plaza Serviced Apartments (SA) in Bayswater, London in 2014.

The PKR vice president said in a statement today that the seller — Larmway Properties Ltd — valued the un-depreciated cost of the apartment at £56.8 million, citing a record from the HM Land Registry on the title of the property.

“The un-depreciated cost of all other assets and the market value of the freehold property at £56 million would have already been a higher than market value of Grand Plaza SA,” said Rafizi.

“Unfortunately, either it was sheer incompetence on the part of Felda’s management (who) then paid £95.65 million for the properties or there was certainly a fraudulent element involved when Felda ended up paying around 70% above market value in 2013,” he commented.

He added that Felda is unlikely to be able to recover the £95.65 million it paid in 2014, considering the overpayment and the prevailing gloomy property market in the UK especially in London post-Brexit.

“This was supported further by Bloomberg’s analysis published last week that properties in London are now widely seen as overvalued,” he said.

Rafizi also pointed to another red flag to the purchase consideration — that Larmway pulled out of an earlier exclusive deal to sell the property at £80 million in favour of Felda’s higher offer.

“At best, Felda overpaid the property by £18 million or RM108 million. At worst, Felda overpaid £30 million or RM180 million,” said Rafizi.

“The world will be aghast at how Felda lavishly offered an exorbitant price above market value to buy Grand Plaza SA, in the same way 1MDB (1Malaysia Development Bhd) has made us infamous so far,” he added.

The Grand Plaza SA, owned by Felda’s subsidiary FIC UK Properties Sdn Bhd, was not investigated by Malaysian Anti-Corruption Commission under a wider investigation on investments by Felda Investment Corp Sdn Bhd — an investment arm of Felda — particularly on its purchase of Grand Plaza Kensington Hotel for £60 million.

Rafizi had earlier argued that the Kensington Hotel deal was overpaid by FIC by £15 million, and that the unit is not owned by FIC, but instead by another company with a similar name, which was registered in British Virgin Islands.