Ex-Johor exco man, son and consultant face 21 counts amounting to RM36m


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JOHOR BARU: Former state executive councillor Datuk Abd Latif Bandi, his eldest son and a property consultant have been charged with a total of 21 counts of money laundering amounting to RM35.78mil in connection with the massive Johor land scandal that broke out in March.
The former state Housing and Local Government Committee chairman was charged with 13 counts of money laundering amounting to RM17.59mil.

His son Ahmad Fauzan Hatim, 25, and Amir Shariffuddin Abd Raub, 44, were charged with four counts each involving RM735,000 and RM17.46mil respectively.

They are said to have committed the offences via cheque transactions at five major banks around Johor Baru between November 2013 and December 2016.

Abd Latif, 51, pleaded not guilty to seven counts under Section 4(1) (b) of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities 2001 (AMLA) (Act 613).

If found guilty, he can be sentenced to 15 years in jail and fined five times the amount or RM5mil, whichever is higher.

He also claimed trial to six counts under Section 4(1)(a) of the same Act, which carries a jail term of up to five years and a maximum fine of RM5mil, if convicted.

Ahmad Fauzan and Amir Sharifuddin also pleaded not guilty to four counts each under the Section 4(1) (b) and Section 4(1)(a) of the same Act, respectively.

Sessions Court judge Mohd Fauzi Mohd Nasir set bail at RM500,000 for Abd Latif, RM200,000 for Ahmad Fauzan and RM400,000 for Amir Shariffuddin in one surety each, to run concurrently with previously charged offences.

He was referring to the 33 counts of graft that Abd Latif and Amir Shariffuddin had claimed trial to on April 19 for allegedly converting bumiputra lots to non-bumiputra lots involving a total of RM30.3mil in Kota Masai, Tebrau, Kulai, Kempas, Nusajaya and Johor Baru.

The judge also fixed July 5 for next mention.

Abd Latif and Ahmad Fauzan were represented by a five-man legal team led by Datuk Hasnal Rezua Merican while lawyer Azrul Zulkifli Stork stood for Amir Shariffuddin.

The case was prosecuted by Malaysian Anti-Corruption Commission (MACC) DPP Mohd Asnawi Abu Hanifah.

Earlier, the three accused arrived clad in orange lockup T-shirts and were escorted by MACC officers into the court at around 8.40am.

The Star by kathleen ann kili

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Johor’s biggest corruption cases: land and housing scandal, slapped with 33 counts of graft


TWO IN COURT: Abd Latif (right) being brought to the Johor Baru Sessions Court by anti-graft officers. He is alleged to have abetted property consultant Amir Shariffuddin Abd Raud (left) in the land development scandal.

After weeks of investigation, state executive councillor Datuk Abd Latif Bandi is finally brought to court to face 33 counts of graft. The land and housing scandal – one of Johor’s biggest corruption cases – is however set to widen as graft busters warn of more suspects to be charged soon.


MACC expected to haul up more people in land and housing scandal

JOHOR BARU: One of the state’s largest corruption scandals is about to get bigger as more people are expected to be hauled up to court in the coming weeks.

Malaysian Anti-Corruption Commission (MACC) deputy chief commissioner (operations) Datuk Azam Baki said they might be charged with the case involving Johor executive councillor Datuk Abd Latif Bandi either this month or next.

Among those to be charged, he said, were those who had been arrested previously.

However, he declined to reveal their names so as not to jeopardise MACC’s investigation, saying that no VIPs were involved.

“We are in the midst of completing our probe with the Deputy Public Prosecutor before charging them in court soon,” he told reporters after meeting MACC investigation director Datuk Simi Abd Ghani and Johor MACC director Datuk Azmi Alias here yesterday.

Azam said it was also possible for Abd Latif, who was jointly accused with property consultant Amir Shariffuddin Abd Raud of committing 33 counts of graft yesterday, to face another round of charges then.

It was reported that eight suspects, including Abd Latiff ’s eldest son as well as his special officer, were nabbed by the MACC on Feb 24.

Anti-graft officers detained them after sifting through stacks of documents seized from the state government and developers.

They also seized luxury goods, including 21 cars such as Bentley, Mercedes-Benz and Porsche, five high-powered motorcycles and 150 handbags.

On its probe into the purchase of real estate in Australia by Mara Incorporated Sdn Bhd, Azam said MACC called up 24 witnesses and visited seven premises, including a law firm, the offices of both Mara Inc and an appraiser, and their associates.

“All related documents have also been seized. We have gathered more new information, and it is a continuous investigation from the previous case in 2015,” he said.

“We need more time to complete this case as it involves another country.

“We have put in a request under a mutual legal assistance with the Australian AttorneyGeneral’s office but have yet to receive any response.

“We will also prepare the documents to be sent to Australia,” he said.

MACC had previously recorded the state- ment of suspended Mara chairman Tan Sri Annuar Musa over the same investigation.

Annuar also handed over several documents relevant to the case.

The issue came to light after Australian newspaper The Age claimed that several senior Mara officials and a former politician had spent millions of Malaysian Government funds to buy an apartment block, known as Dudley International House, in Melbourne

Azam said his officers were also in the midst of preparing a report into alleged match fixing by football players from the Malaysian Indian Sports Council-Malaysia Indian Football Association.

“We expect this case to be completed within two to three weeks after we hand over the report to the deputy public prosecutor for charging.

Source:The Star headline news

Slapped with 33 counts of graft

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JOHOR BARU: State executive councillor Datuk Abd Latif Bandi has been charged in the Sessions Court here with 33 counts of graft, the earliest of which stretches back to just six months after he assumed office.

TWO IN COURT: Abd Latif (above) being brought to the Johor Baru Sessions Court by anti-graft officers. He is alleged to have abetted property consultant Amir Shariffuddin Abd Raud (below) in the land development scandal.

Abd Latif, 51, was sworn in to his post as Johor Housing and Local Government Committee chairman in 2013 and according to the list of charges, he allegedly abetted property consultant Amir Shariffuddin Abd Raud on Nov 13 that same year to convert bumiputra lots into non-bumiputra lots.

Yesterday, the court interpreter took about 15 minutes to read the list of charges to each of the accused in the case, considered one of the biggest corruption scandals in the state.

In total, Abd Latif is said to have abetted Amir, 44, to convert 1,480 houses.

He is also accused of helping to reduce the quantum of payment that developers had to contribute towards the Johor Housing Fund for converting these lots.

The offences, the last of which supposedly took place on Sept 13, 2016, involved payments of between RM100,000 and RM3.7mil.

Totalling some RM30.3mil, this involved development projects in Kota Masai, Tebrau, Kulai, Kempas, Nusajaya and Johor Baru.

Among the converted lots were apartments, double-storey terrace homes, cluster houses, cluster industrial lots, semi-Ds and bungalows.

Abd Latif was charged under Section 28 (1) (c) of the Malaysian Anti-Corruption Commission (MACC) Act for abetment, which was read together with Section 16 (a)(B) for accepting bribes.

Amir was charged with 33 counts under Section 16 (a)(B) for accepting bribes for himself and Abdul Latif.

Judge Mohd Fauzi Mohd Nasir set bail at RM2mil in one surety for each of the accused and ordered their passports to be surrendered until the trial was over. He also fixed May 23 for mention.

At press time, only Amir posted bail while Abd Latif, who was unable to raise the amount, was sent to the Ulu Choh detention centre.

Earlier, 15 minutes after Abd Latif and Amir were ushered into the packed courtroom, a defence lawyer stood up and asked for their “Lokap SPRM” orange T-shirts to be removed.

Both Abd Latif, who took time to hug and shake the hands of several people, and Amir then changed into long-sleeved shirts.

Abd Latif was represented by a six-man legal team led by Datuk Hasnal Rezua Merican while two lawyers, headed by Azrul Zulkifli Stork, stood for Amir.

The case was prosecuted by MACC director Datuk Masri Mohd Daud, with assistance from Raja Amir Nasruddin.

Source: The Star by Nelson Benjamin and Norbaiti phaharoradzi

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Good time to invest in property now


Better upside: (from left) Knight Frank Sdn Bhd international project marketing (residential) senior manager Dominic Heaton-Watson, Knight Frank Asia-Pacific research head Nicholas Holt, Sarkunan and capital markets executive director James Buckley at the event

KUALA LUMPUR: The slowdown in the local property market has bottomed out, with prices seen picking up later this year, according to property consultancy firm Knight Frank Sdn Bhd.

“We predict a stable rate in 2017 and we will possibly see better upside towards the end of the year or early next year,” Knight Frank managing director Sarkunan Subramaniam said.

“The market has had a few years of contraction and we feel that this year, what will clear up one of the major concerns of most investors is the political uncertainty,” he said at the launch of Knight Frank’s 2017 Wealth Report here yesterday.

According to the report, “political uncertainty” was among the top concerns of its respondents in Asia at 25%.

“We’re going to have elections possibly this year. Once they have cleared, there will be positive movement in the market and that’s why I feel now is a good time to buy property in Malaysia.

“Once the elections are out, the economy will generally start picking up and sentiments will improve. Capital will also start coming in,” he said.

According to the wealth report, potential fall in asset values was the highest concern among its Asian respondents at 30%, followed by rising taxes and tighter controls on capital movement at 28% and 27% respectively.

Going forward, Sarkunan said affordable homes would primarily drive the local property market.

“Affordable homes will still be a driver to an extent, but medium-to-high end properties will also pick up again. Also, when the mass rapid transit (MRT) lines come into the city, it will drive the commercial market there as well.

“We’ve had a lot of decentralisation push over the last 10 years and the MRT will bring office workers to the city.”

Sarkunan pointed out that locations with light rail transit (LRT) and MRT lines, such as Damansara Heights, have bucked the trend in terms of condominium values.

“Prices have actually increased compared with some of the other areas in Malaysia. Transport hubs or transport-orientated developments, such as Kota Damansara, have also seen improvements in prices.”

The Knight Frank 2017 Wealth Report tracks the value of luxury homes in 100 key locations worldwide, including 19 destinations from Asia Pacific.

According to the report, values rose globally by 1.4% on average last year, compared with 1.8% in 2015. Asia was the second best performing world region last year, with prices rising 5.1%.

Australasia was the strongest performing world region with prices rising 11.4% year-on-year.

Source: BY EUGENE MAHALINGAM The Star/ANN

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Protecting house buyers’ interest


I REFER to the reports “Court: No power to grant extension” and “A fair and right judgment, says housing developer” ( The Star, Feb 28 – Developer has to compensate buyers for delays of projects, Court says).

The High Court decision declaring as ultra vires (beyond one’s legal power or authority) the Housing and Local Government Minister’s granting of a one-year extension of time (EOT) to developers to complete a delayed housing project and thus denying house buyers liquidated and ascertained damages (LAD) provided for under the sale and purchase agreement is timely, sound and indeed meritorious. It is hoped that the decision would be maintained should the minister decide to appeal it.

The Housing Development (Control and Licensing) Act 1966 was enacted for the protection of home buyers.

The long title of the Act (paragraph stating Parliament’s intent for the Act) says: “An Act to provide for the control and licensing of the business of housing development in Peninsular Malaysia, the protection of the interest of purchasers…” This makes clear that the housing development business is regulated to ensure that the protection of home buyers’ interest is paramount.

Two eminent judges, the late Tun Mohamed Suffian, former Lord President of Malaysia, and the late Tan Sri Lee Hun Hoe, the longest serving Chief Justice of Borneo, stated this in two landmark cases respectively.

Suffian LP (Sea Housing Corporation v Lee Poh Chee): “To protect home buyers, most of whom are people of modest means, from rich and powerful developers, Parliament found it necessary to regulate the sale of houses and protect buyers by enacting the Act.”

Lee Hun Hoe CJ (Borneo) (Beca (Malaysia) Sdn Bhd v Tan Choong Kuang & Anor): “The duty of observing the law is firmly placed on the housing developers for the protection of house buyers. Hence, any infringement of the law would render the housing developer liable to penalty on conviction.”

Respectfully, it is submitted that the decision to grant the developer of a housing project extension of time and thus deny the home buyers’ statutory rights to LAD ought to be exercised with diffidence. The decision, if any, ought to be made with the Act’s long title in mind, namely, “for the protection of interest of purchasers”.

In doing so, some aspects to consider are:

> In granting EOT, how will home buyers’ interest be protected?

> LAD is agreed monetary payment for home buyers’ losses for delay in completion of a housing project. Is denying home buyers’ the LAD by the EOT tantamount to protecting their interest?

Although Section 11(3) of the Act states that the developer under “special circumstances” may apply to the Controller of Housing for EOT, it is submitted that Parliament and the long title of the Act surely did not intend LAD to be wiped out by “a stroke of a pen”.

To avoid doubt, “special circumstances” would mean act of God or natural disaster, for example earth quake or tsunami, and not business or economic related challenges or hardship.

The above view would make legal sense of Section 11(3).

Again, the High Court decision is lauded.

Home buyers’ interest is of paramount importance under the Housing Development (Control and Licensing) Act 1966. The Controller of Housing’s or Minister’s decision, although seemingly made “by a stroke of a pen”, must materialise or recognise this intent. Failing to do so would be ultra vires the Act.

May the redeeming light of the Housing Development Act (Control and Licensing) 1966 continue to shine effervescently and protect effectively home buyer’s interest for many years to come.

This letter is dedicated to the National Housebuyers Association, its great team of lawyers, professionals and volunteers for their sterling and pro-bono efforts to speak up for and preserve home buyers’ interest.

Source: ROBERT TAN,  Home buyer and author of Buying Property From Developer: What You Need To Know And Do, Petaling Jaya

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Developer has to compensate buyers for delays of projects, Court says


 

 
Take them to task: According to the liquidated damages clause, condo buyers can claim 10 per annum of the purchase price for the delay

KUALA LUMPUR: The Housing Controller has no power to grant an extension of time to developers who delay the completion of housing projects, the High Court has ruled in a landmark judgment.

This means a housing developer has to pay compensation to the affected buyers for delays in the delivery of vacant possession.

High Court (Appellate and Special Powers) judge Justice Hanipah Farikullah also held that the regulation which empowers the Controller to modify terms of the contract of sale was ultra vires the Housing Development, Control and Licensing Act.

The judge said this in allowing an application for judicial review by 71 buyers of the Sri Istana condominiums in Old Klang Road against the Housing Controller and Urban Well-being, Housing and Local Government Minister.

Their lead counsel Datuk Wong Kok Leong told The Star the judge held that the minister’s decision to grant the developer an extension of time to complete the project via a letter dated Nov 17, 2015 was invalid.

In the letter, the minister had granted the developer a 12-month extension to complete the project.

“This means that the Housing Controller has no power to grant an extension of time to housing developers for any delay in completing their projects,” Wong said.

“Now, the developer has to pay the liquidated damages (a pre-determined sum) for late delivery of vacant possession of those condominium units.”

Wong called the decision a landmark judgment as many project developers seek extensions to complete their projects in Malaysia.

“This is a victory for all house buyers. With this ruling, the housing developer can’t just go to the Housing Controller for an extension of time to complete the project in order to avoid paying the liquidated damages to house buyers.

“This is because if an extension of time is allowed, house buyers lose their rights to claim damages for late delivery of vacant possession,” he added.

Wong explained that according to the liquidated damages clause, the condo buyers can claim 10% per annum of the purchase price for the delay.

In their application for judicial review, the condo buyers stated that they wanted to quash the decision allowing BHL Construction Sdn Bhd an extension of time for the delivery of vacant possession from 36 months to 48 months.

They also asked the court for a declaration that Regulation 11(3) was ultra vires of the Housing Development Act (Control and Licensing) Act.

Wong said the judge has ordered the parties to address the issue of costs on the next date for case management.

When contacted, SFC Mohamad Rizal said the judge also allowed a similar application involving another group of condominium buyers involving the same developer and project.

Source: By  m. mageswari, royce tan, thean lee cheng, eugene mahalingam, The Star

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When will the property market pick up?


Affordable living: The history of Stuyvesant Town, Manhattan New York dates back to 1943. In October 2015, Blackstone Group LP led a deal to buy New York’s Stuyvesant Town-Peter Cooper Village, a transaction that would put Manhattan’s biggest apartment complex in the hands of the world’s largest private equity firm and maintain some affordable housing at the property.

 

Experts predict between 2018 and 2019

AT a recent property seminar organised by Asian Strategy & Leadership Institute, several developers and property consultants had a debate predicting when the property market will pick up.

Real Estate and Housing Developers’ Association Malaysia (Rehda) patron Datuk Jeffrey Ng Tiong Lip reckoned the residential sector should recover next year or in 2018.

Ng was the moderator for the session on The Future Outlook and Challenges of the Housing and Property Sector.

Property consultants Savills Malaysia managing director Allan Soo, who specialises in the retail malls, expects a 2019 recovery.

Office market specialist Jones Lang Wootton executive director Malathi Thevendre declined to make any predictions. “It all depends …,” she says.

Ng says the current slow housing market is actually good over the long term, although it is painful in the short term. It all depends on how we manage “the noise”, he says.

There are lots of noises at present, both on the national and international level.

“If next year is election year, the recovery – if there is one – will be after that because between now and then, there are so many uncertainties.

“There is a lack of clarity at the moment,” says Ng.

His reading of the property crystal ball of a 2017/2018 turnaround is by far the most positive and contrasts with Kenanga Investment Bank Bhd equity research head Sarah Lim Fern Chieh.

Lim expects house prices to be flattish or slightly weak depending on locations “over the next four to five years, if there are no major policy changes”.

Her rationale for a longer down-cycle is simple. If your destination is Genting Highlands, but you are driving in the opposite direction, you will need a longer time to arrive there when you finally realise you are driving in the wrong direction.

Although it is widely accepted that the property cycle is between eight to 10 years, within this cycle are “mini two-year cycles. There were two-year up-cycle in 1999-2000 after the Asian Financial Crisis, and another in 2003-2004 and 2007/2007.

But after the 2008 Global Financial Crisis, Malaysia had an extended five-year up-cycle between 2010 and 2014 with prices peaking in 2013, and this was largely due to quantitative easing (QE).

She is, therefore, expecting a longer consolidation period of between four and five years, starting from 2015, before the next up-cycle, barring any policy changes and the global economic climate.

She is also expecting the property market to experience structural changes due to affordability and liquidity factors, among others.


More realistic pricing

Notwithstanding the fuzzy horizon, there are nevertheless a few certainties which may well put the sector on a better footing.

First, home ownership has become a national issue.

Second, the government, at both federal and state levels being landowners, are stepping up on affordable housing.

Third, prices are expected to be more realistic going forward.

Rehda president Datuk Seri FD Iskandar Mohamed Mansor is seeking government cooperation to reduce or waive development charges and other charges, collectively known as compliance costs, in order to bring down prices as this is “too challenging” for private developers to go it alone, considering today’s high land prices.

“If the Government wants developers to build more affordable housing, give us cheaper premiums or don’t charge at all.

“We will then see more stability in prices, or even a reduction, if development charges and all sorts of other charges imposed on developers come down,” said FD Iskandar at a Rehda first half-year review recently.

He says property development and land matters have been the biggest revenue earner for every state. Both federal and state governments own large tracts of land. Although FD Iskandar had made this call before, he was very passionate and firm this time around. Other developers, previously silent, are also quite vocal about the various land and development charges they have to fork out.

This is probably the first time developers are coming together to make a collective public call to seek a waiver or reduction of development and other aspects of compliance cost. The effectiveness of that call depends on the Government’s will to act.

While developers can clamour for such waivers, what is facing the market today is weak sales and this in turn is forcing developers to tweak pricing and strategy a bit, hence the drop in the number of launches as they try push unsold stock.

Andaman group managing director Datuk Seri Vincent Tiew says developers will be offering “more realistic pricing” from now onwards with location being a paramount factor.

There will be more affordable housing and this can be seen from the various affordable housing projects being planned by both the federal and state government although the end-products are slow in coming.

This, says Tiew, can be seen in the various agencies under the federal and state governments, among them being PR1MA Corp mandated to build 500,000 units of affordable housing units by 2018, as outlined in Budget 2013.

A total of 240,000 houses were due by end-2015, with an annual mandate for 80,000 between 2013 and 2015. The number of completed units was 883 at the end of 2015, says Tiew. By the end of this year, 10,000 units are scheduled to be completed. The number of units approved to date are 232,807 against 1.24 million PR1MA registrants as of February 2016. All eyes will be on the affordable segment in the coming Budget 2017.

Healthy demand

The demand for housing has always been there. The issue is affordability, says Kenanga’s Sarah Lim.

“Of late, developers are beginning to price units at RM500,000 and below,” she says.

The current change in direction is attributed to societal and government pressure. Unsold stock and government pressure forced developers to relook their pricing strategy.If developers keep building RM1mil homes, when the threshold is RM500,000 and less, they will be left holding unsold stock. In order to move stocks, creative marketing/financing strategies are employed to move these stocks.

Lim says if developers were unable to meet at least 40% of their sales target by mid-year, they would be unable to meet this year’s targets.

More than two-thirds missed their sales targets last year.

“Prior to this, what was booked was considered sold. Now, this is no longer true,” Lim says.

Lim says there are two issues here, the pressure on the sector as the rate of aborted sales crept up and the people’s demand for realistic prices.

“What we are seeing today is the government’s influence. It is actually steering the market in the right direction,” she says.

Renting the way forward

The other certainty is observed in the rental market, which is expected to continue to be soft next year.

There will be “low occupancy rate” for projects completed last year (2015) and this year, with rental yield at less than 3% a year, says Andaman group’s Tiew.

It is cheaper to rent than to buy. There is so much supply going around and the purchasing power of the ringgit is shrinking.

Selangor State Development Corp (PKNS) senior manager (corporate planning and transformation) Norita Mohd Sidek advocates renting.

She says if there is a 50% loan rejection rate for affordable housing, and considering the limited supply by private developers, renting may be the only option.

She suggests building affordable housing cities the likes of Stuyvesant Town’s Peter Copper Village, Manhattan New York and counters the argument that there is no money to be made from affordable housing.

In October 2015, Blackstone led a deal that put Manhattan’s biggest apartment complex in the hands of the world’s largest private equity firm and maintain some affordable housing at the property.

Blackstone and Canada’s real estate company Ivanhoe Cambridge Inc acquired the 80-acre enclave for about US$5.3bil. Rent is kept below market rates for some 5,000 units. Public transport and other amenities must be part of the development for it to succeed. “Government grants and resources are needed to identify the right location to built more council homes,” she says in her paper.

In today’s low yield environment, pension funds around the world are looking at other ways to generate dividends besides equities and fixed income securities. They are buying into infrastructures and large township developments where there are economies of scale for maintenance.

Malaysia’s national housing dilemma cannot be solved by profit-oriented private developers alone. The golden property years between 2010 and 2014 have been intoxicating, having resulted in expectations of 20% to 30% rise in sales year-on-year, like the manufacturing sector. But the property sector is quite unlike manufacturing. The reflection point was seen in 2014 after the government introduced certain cooling measures and anti-speculation sales gimmick.

Going forward, the emphasis on housing priced RM500,000 and below means developers have to sell more units to make the same sales value as previous years.

“They have to sacrifice some of their margins. Higher profit margins can be had from the mid- to high-end segments,” says Lim. They will have to work harder to help buyers secure loans.

This search for some form of cohesion in the national housing arena has taken a bit of time. Hopefully, the coming Budget 2017 will pave the way for more positive action.

By Thean Lee Cheng The Star/Asia News Network
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