(May 7): Pilgrims' fund Tabung Haji confirmed that it had bought a parcel of land from 1Malaysia Development Bhd (1MDB) at the Tun Razak Exchange (TRX) project after its chairman, Datuk Seri Abdul Azeez Abdul Rahim, denied any such deal a day earlier.

In a statement emailed to the The Malaysian Insider today, Tabung Haji chief executive officer (CEO) Datuk Johan Abdullah said that the fund had invested in a piece of land with the plan of building a residential tower at the price of RM188.5 million.

It denied, however, that it had bought a second parcel of land from 1MDB at TRX as alleged in a blog yesterday.

"Leakages of proposal papers are not proof of approved investment decisions," Johan said in his statement.

He added that the RM188.5 million paid for the parcel of land in TRX was at a "discounted" price to current market value.

 A blog called "The Benchmark" yesterday said that the fund had forked out RM772 million in cash to buy two plot of lands in TRX in a land deal agreed on in April.

1MDB currently sits on an RM42 billion debt and is facing a cash flow problem.

Johan said the value of the land had been appraised by an “independent professional valuer”.

"The investment is a commercial decision which fits with Tabung Haji's risk appetite and went through all internal process accordingly."

He said the proposed residential building would be developed by Tabung Haji's subsidiary, TH Properties Sdn Bhd.

"Tabung Haji will continue to explore investment opportunities in the domestic market as guided by its strategic asset allocation framework," he said.

Earlier today, DAP federal lawkmaker Zairil Khir Johari expressed concern over the purported deal after a blog posting which said LTH had paid RM722 million, or between RM2,860 and RM3,900 psf, for the two plots. The Bukit Bendera MP described this as "unbelievably exorbitant" since 1MDB had bought the land for RM64 psf four years ago.

“This issue would not be such a major concern to the public if LTH were a private developer gambling its money on a high-risk project. Unfortunately, LTH, as the Malaysian haj pilgrim funds board, should facilitate and manage the savings of Muslims towards fulfilling of the fifth pillar of Islam – the holy pilgrimage to Mecca.

“With such a responsibility on its shoulders, investments made by LTH should be shariah compliant and not overtly risky so as not to jeopardise the savings of millions of pilgrims.

"As my family and I are also depositors with LTH, I am shocked by this unnecessarily high-risk investment decision," he said in a statement this morning.

Tabung Haji is a government-linked financial organisation that facilitates savings for Muslims planning pilgrimages to Mecca. – The Malaysian Insider