(September 24): As more questions surface about the 1Malaysia Development Board (1MDB) and its lack of transparency, the Penang government is pushing for answers to the sovereign fund's purchase of land in the state.

With debts reportedly amounting to around RM38 billion after operating for five years, Chief Minister Lim Guan Eng said the people have the right to know how IMDB, which is the federal government investment arm, used its funds.

In Penang, he said the board purchased 234 acres of freehold land in Air Itam in two deals on April 29, 2013, just six days before the May 5, 2013 general election; and in a third and final deal on September 23, 2013.

"Why was the purchase price at RM1.38 billion, 95% higher than what some of the land was valued at, just two years earlier in December 2011?

"What would be the benefit to 1MDB and finally to the people of Malaysia that owns 1MDB?" he said in a press conference at his office today.

Lim raised these questions based on a report in The Edge Weekly, dated September 22-28, 2014.

He also asked what had happened to the 2013 general election promise by Barisan Nasional (BN) to build 9,999 units of public and affordable housing via 1MDB.

BN had promised to build 6,666 low-cost flats measuring 700 sq ft each, and 3,333 affordable homes of 1,000 sq ft each.

"This was a political ploy, a politically-motivated business transaction... (there was a) big election campaign to take me down (during the polls last year) although they were unsuccessful," Lim said.

He also raised concerns that 1MDB may face nett losses of at least RM1.5 billion by building the homes.

"Based on the acreage of the land and the number of new homes the federal government promised to build, would 1MDB be facing a loss of over RM1.5 billion and who will ultimately bear the losses?

"Even if 1MDB does not keep BN's promise to build the 9,999 homes, it will still incur financial losses. Assuming a financing cost of 4%, and interest payment on the RM1.38 billion it spent on buying the land, it works up to RM55 million interest cost per year.

"Can 1MDB give a full explanation, not only because public funds are involved but because it affects the lives of the nearly 3,000 families residing on the 234 acres of freehold land for 50 years?" he said.

In the Air Itam land's case, he said the matter was not so straightforward as there are several landowners.

Lim, who is also Bagan MP and DAP secretary-general, said he had raised these questions concerning 1MDB in Parliament several times but the government never provided answers.

"If public funds are used by 1MDB, the people have the right to know how the money is used... it is a question of integrity and honesty," he said.

1MDB has been in the limelight since former prime minister Tun Dr Mahathir Mohamad openly criticised the government-owned investment company earlier this month.

Dr Mahathir slammed 1MDB of its heavy debts and for spending billions of ringgit to buy power plants from conglomerate Genting and Malaysian tycoon Anandakrishnan, paying above the market price for them.

The Edge Financial Daily also reported today that major global investors from Qatar and Abu Dhabi were said to be considering pulling billions of ringgit out of 1MDB projects, namely the Tun Razak Exchange and Bandar Malaysia, due to the lack of transparency and slow progress.