PETALING JAYA (May 21): TRX City Sdn Bhd “did not see a single cent” of funding worth US$3 billion (RM11.9 billion) raised in 2013 for the Tun Razak Exchange international financial district, despite statements in 2013 claiming that the money would be used for the development of the international financial district, reported The Star.
Citing a source, the publication said TRX City – which is the property arm of 1Malaysia Development Bhd (1MDB) – had to sell parcels of land within the 70-acre development to finance its infrastructure cost of RM3 billion.
This is reflected in the National Audit Department report on 1MDB dated May 15, 2018 which said TRX City had to sell five parcels for RM1.36 billion, with RM1.1 billion from the sale “advanced” to 1MDB.
The sale was necessitated by a deal that did not take off, according to the report – in March 2013, a 50:50 joint venture between 1MDB and Aabar Investments PJS named Abu Dhabi Malaysia Investment Company Ltd (ADMIC) was announced as the “first major multinational anchor investor” in TRX with an initial funding of US$6 billion.
Aabar is 95.47%-owned by state investment fund International Petroleum Investment Corp (IPIC).
1MDB then announced in April 2013 that it had raised US$3 billion via the issuance of notes by 1MDB Global Investments Ltd with an interest rate of 4.4% a year and a due date in 2023.
“TRX did not see a single cent of it,” a source told The Star.
The investigations into 1MDB had prompted concerns by the development’s stakeholders over the status and progress of the TRX – which aspired to become an international hub of Islamic banking and finance.
“Will TRX, as an international financial centre, be aborted? Will stake holders be asked to go slow?” asked a stakeholder.
Among the stakeholders are Australian property and infrastructure group Lendlease, which entered into a joint venture with TRX City in 2014 to develop a 17-acre lifestyle quarter which includes a retail mall named The Exchange TRX.
The company said it aims to engage with relevant ministries at “the earliest opportunity”.
“Government clients are key customers in each of the regions in which we operate and are instrumental players to all successful urban regeneration projects led by Master Developers to deliver city-defining, positive impacts.
“While Lendlease’s strategy is based on long-term trends, we continuously assess changing political dynamics as they arise,” it said.
Other projects within the TRX include the Exchange 106 skyscraper, which is Malaysia’s tallest building and is expected to be operational in 1Q19.