Sorry Folks, Here’s Why LGE & Toyo’s Bungalow Scandals Aren’t Similar



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Mar 26 2016
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Lim Guan Eng (LGE), if he’s a kopitiam boss or a roast pork seller, would not get the attention (and trouble) he’s getting now. In fact, nobody would care that he had struck a good deal getting himself a bungalow for RM2.8 million – a crazy discount to market value. At 10,161 square feet, his bungalow in Jalan Pinhorn, Penang, was a steal at RM276 per square foot.

 

Unfortunately, Mr. Lim is no ordinary Chinese Ah Pek but the Penang Chief Minister. The worse part – he’s the leader of an opposition party DAP (Democratic Action Party) who commands 90% of Chinese votes. Therefore, whenever he buys or sells something, the price must be “ngam-ngam (precise)”. He can neither buy a bungalow below nor above market price.

Lim Guan Eng - Penang Chief Minister

If he buys a real estate “below” market price, then he is being rewarded for helping the seller on certain project. If he buys a property “above” market price, then he is cleaning dirty money through money laundering. That’s how the perception game is being played. Heads Guan Eng loses, tails Guan Eng also loses. This is madness, is it not?

 

In other words, Lim Guan Eng can never own a bungalow worth millions. Unless he switches sides to UMNO, he can only rent a bungalow or buy a condominium within his financial means. That’s because condominium should roughly fetch the same price within the same block, unless heavily renovated, unlike a bungalow sitting on a 10,161 square feet plot of land.

Lim Guan Eng Bungalow – RM2.8 Million (Jalan Pinhorn, Penang)

In the same breath, Mr. Lim would get himself into trouble too if he plans to buy some properties through “lelong (auction)”, a normal process conducted by banks to get rid of real estates seized from past owners who couldn’t pay their scheduled mortgage loan. Again, he must ensure the price he bids for lelong properties must be “ngam-ngam” (*grin*).

 

Apparently, the seller of the bungalow, Miss Phang Li Koon, has signed a SD (Statutory Declaration) to relieve pressure on Lim Guan Eng. It seems the seller was a great admirer and supporter of Mr. Lim. She was also a close friend of the Chief Minister’s wife, Betty Chew. So, it was a “goodwill sale” after the Lim family rented the bungalow since 2009 at RM5,000 per month.

Penang Bungalow Scandal - Lim Guan Eng and Phang Li Koon

There’re 1,001 reasons why Guan Eng could buy the controversial bungalow for RM2.8 million, well below market price, if he was an ordinary folk. The bungalow could be haunted. Miss Phang has a crush on him. Betty Chew was a world class haggler she often gets free McDonald’s meal. Miss Phang was so touch because Guan Eng has taken care of the bungalow – polishing and waxing toilets daily.

 

The Penang Chief Minister claimed that he had bought his bungalow on a “willing buyer-willing-seller” basis. After all, it was a 30-year-old bungalow with “no” swimming pool (*grin*). He took a bank loan of RM2.1 million and paid the remaining RM700,000 in cash based on his income as the chief minister and an elected representative.

Lim Guan Eng Bungalow – RM2.8 Million (Jalan Pinhorn, Penang) - Interior

But that was exactly what had happened to former Selangor Chief Minister Khir Toyo, screamed UMNO politicians and bloggers. Mr. Khir had used “willing buyer-willing-seller” argument to justify his purchase of two plots of land and a bungalow in Shah Alam below market price. Still, he had failed to convince judges and was sentenced for 12 months behind bars.

 

Using Khir Toyo’s case as a yardstick, Lim Guan Eng should therefore go to prison too. Actually Khir could be saved by UMNO and need not go to jail. However, he was one of Mahathir’s boys so when Badawi and Najib took over, he was flushed out of favour. And when he lost the Selangor state in the 2008 national election, he was of no use to UMNO.

Khir Toyo’s Bungalow – RM3.5 Million (Shah Alam, Selangor)

That was why Khir was officially charged in 2010. That was why out of hundreds of UMNO leaders who purchased bungalow below market price or even given free by businessmen, only Khir was charged. That was why UMNO didn’t instruct judges to close one eye on Khir’s case, as they normally would. But how different was Khir Toyo’s bungalow scandal to Lim Guan Eng’s?

 

  1. Ditamas Sdn Bhd director, Shamsuddin Hayroni, bought his bungalow at RM5 million, excluding renovation cost of RM1.5 million, but sold the renovated property to Khir Toyo at lower price of RM3.5 million. On the other hand, Miss Phang Li Koon bought her bungalow in 2008 for RM2.5 million and sold it to Guan Eng for RM2.8 million. Shamsuddin sold it for a 46% loss while Miss Phang sold it for a 12% profit.
  2. Shamsuddin admitted that he had sold his two plots of land and a bungalow at a price of RM3.5 million to Khir Toyo for fear of jeopardizing his housing projects in Selangor. Miss Phang signed a SD and admitted she sold her property out of fear of Barisan Nasional’s constant demonstration, harassment and stress instead.
  3. Shamsuddin admitted he personally did not agree with the RM3.5 million price wanted by Khir Toyo and told him the property should be at least between RM5 million to RM5.5 million. On the other hand, Miss Phang was honoured and happy to sell her bungalow to Lim Guan Eng and his family for RM2.8 million, due to respect.
  4. By their own admissions, Shamsuddin had a business relationship with Khir through PKNS. On the other side, Miss Phang (through her SD) and Mr. Lim announced they have no business relationship whatsoever.
  5. In his capacity as PKNS Chairman, Khir Toyo had admitted to giving a letter of support to Ditamas Sdn Bhd director, Shamsuddin Hayroni, who bids for PKNS projects. In her SD, Miss Phang denied the allegations of being a director or shareholder of KLIDC company which has successfully bid for the Taman Manggis land. Additionally, Taman Manggis land was sold for RM11 million through “open tender”, not to mention Mr. Lim wasn’t part of the tender committee.

Shah Alam Bungalow Scandal - Khir Toyo and Shamsuddin Hayroni

It would be extremely stupid for Lim Guan Eng, an accountant, to get himself into corruption in the purchase of the bungalow, knowing very well Malaysian Anti-Corruption Commission (MACC) and the rest of the government agencies are eyeing his every single move. There’s simply no case against him because he had taken all the necessary precautions to prevent from being trapped or implicated.

 

Khir Toyo was found guilty primarily because what the courts did not look kindly upon was the fact that the said property was bought (by Khir) at a lower price, compared with the much higher price when the property was purchased by (seller) Shamsuddin Hayroni. So the keyword here is purchase price and selling price, NOT market price.

Former Selangor Chief Minister Khir Toyo and Wife

Shamsuddin’s selling price to Mr. Khir was “lower” than his purchase price. Miss Phang’s selling price to Mr. Lim was “higher” than her purchase price. Both Shamsuddin and Miss Phang sold their properties below market price though. In short, Shamsuddin made a terrible 46% loss while Miss Phang made a not so handsome 12% profit.

 

But as long as Miss Phang didn’t make any losses selling her bungalow, judges may find it hard to compare Guan Eng’s case to Khir Toyo’s. She had made a cool RM300,000 or 12% profit on his investment of RM2.5 million on the property. And based on her SD, it was clear there were elements of goodwill, respect and gratitude due to Guan Eng’s administration of Penang.

Phang Li Koon and Shamsuddin Hayroni - Profit and Loss Comparison

There’s no law that says one cannot sell real estates at below “market price”, as long as one doesn’t sell it at a loss – below “purchase price” – without a compelling reason. There’s little doubt that “willing buyer-willing-seller” applies in Lim Guan Eng’s bungalow transaction but not Khir Toyo’s. Perhaps UMNO doesn’t understand how Chinese do business.

 

As far as Miss Phang is concerned, the sale was still a good deal because she didn’t lose money. She just made less profit. Not all business deals must be done with maximum profit. That’s why IT Mall, Low Yat Plaza, is doing a roaring and long-term business despite making lesser profit margin than UMNO-sponsored MARA Digital Mall.

Malaysian IGP Khali Abu Bakar - Lim Guan Eng and Phang Li Koon - Bungalow Scandal

What Najib administration has, however, is the indirect link between Lim Guan Eng and Miss Phang Li Koon. And you can bet your last penny that UMNO will use its usual tactics – threat, intimidate, harass, bribe – on the Chinese woman until she changes her SD, the same way private investigator Balasubramanim and his wife did on the Altantuya murder scandal.

 

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Comments

haiya apek

so obviously biased

Very good that you pointed out the differences, as if the MACC know where to start!

Good analysis you noticed that.
Perhaps its better not to play with UMNO game, to compare LGE case and Toyo case. Look at all the documents produced by UMNO. Claim on Taman Manggis land title change, offer from Penang BN on the land, draft agreement KLIDC to sell the land, announced state plan showing it was agreed PPR location to change from Taman Manggis to bigger land etc. Might be interesting.
I like to watch LGE’s hand during press conference at the bungalow, reminds me of najib always swipe his mouth during UMNO assembly.

It does not matter if you are in opposition or in government when you are in politics all things are about timing and political acumen. LEG has neither.

Mt Lim bought a PRIVATE PROPERTY from a PRIVATE PROPERTY owner through a willing-seller – willing-buyer contract. What’s wrong is that? That bungalow is not a State Property, mind you.

Phang li koon neither make a profit… Finance cost, legal nd SnP Stamping Fees cost her about RM300K++.. this does not included the cost of renovation…

you’re right puff_midy … she also made losses from the years of rental income …

You forgot to mentioned that when Shamsuddin buy the bungalow, he wanted to renovate it. Done halfway, then sell to khir toyo. So, khir toyo buy a half completed bungalow.

Second point, valuer Rahim and co also give the bungalow at value of RM 3.5 million. So, khir toyo buy the bungalow based or value recommended by a respected company, rahim n co.

Zan,

Still, Shamsuddin made a loss of RM3 million … And the judges were not convinced because the purchase price was HIGHER than selling price …

Cheers ….

The argument never make sense..the arrangement lebih kurang camni la..u jual murah..saya tolong cepatkan dan dapatkan convertion..dah tahu ada precedent khir toyo..naper masih ingin lakukan.willing seller n willing buyer x logik..sebab ada relationship di belakang dan ada deal..yg di selesaikan..orang x skolah pun tahu..lu tolong gua..gua tolong lu ma

abdul aziz … sekarang semua orang kata jual murah … tapi agreement untuk jual tu masa 2012, 4 tahun lalu … so, after 4-years, harga melambung naik … kalau sekarang ekonomi meleset, harga jatuh, tak de orang nak jerit kata lu tolong gua, gua tolong lu …

Missing the point here. Forget the obvious expected bias (Toyo vs LGE – a wrong is still a wrong) and look at the details (http://www.theedgemarkets.com/my/article/macc-arrests-guan-eng-over-bungalow-purchase) of the case. LGE (PCM, public servant) buys property from Phang Li Khoon (friend and businesswoman), valued about RM4.27m, for RM2.8m at a RM1.9m discount. That would have been perfectly fine if LGE and Phang were complete strangers engaging in a straight ahead S&P transaction and the property was purchased at market value (and not at an unusually high discount). The problem is that the relationship between LGE and Phang was a not so straight ahead one with Phang:

1. being a close friend to Betty Chew, wife of LGE and therefore the “goodwill sale”/discount (maybe not so much of an issue here).
2. is an alleged shareholder in Magnificent Emblem Sdn Bhd that had put in a rezoning application to the city council for conversion of land status which got rejected – suggestion of conflict of interest with Phang’s connections to LGE (has to be proven of course – first charge against LGE under Section 23 of the MACC Act 2009 where “a public officer using its office or position for gratification in making a decision or taking an action whether for himself, a relative or an associate who has a direct or indirect interest in that decision or action.”).
3. had sold the property at a massive discount to LGE who is a public servant (the main issue here – second charge against LGE under Section 165 of the Penal Code which, “concerns the offence of a public servant obtaining a valuable item, without consideration from a person involved in any proceeding or business transacted by such a public servant.”).

LGE, as a public servant, should not have:

1. purchased the property from a person whom he had prior relations with.
2. purchased a property from a person with business interest and dealings with the state government.
3. purchased a property at such an unusually high discount knowing full well that it may be seen or construed as an incentive or bribe or obtaining a valuable item.

It looks as though there is wrongdoing here by LGE. At least for the second charge. Again, putting the obvious bias aside, a wrong is still a wrong. You, LGE (Mr. Can Do No Wrong / Mr. “Clean”), scream “stop corruption!” but break the law. Practice what you preach. Pleading ignorance of the law is not a defense and a lame excuse. As a law maker, you should know better than to allow yourself to be in ANY position/situation that puts you and your integrity in question and thus easily falling prey to your contenders/opposers/enemies by giving them a foothold to step on you, which, like in this very instance have they used this situation against you.

Let’s not be too quick to draw conclusions. Sure, political motivation is all too obvious. Sure, LGE’s and Toyo’s bungalow scandals aren’t similar. But that does not change the fact that if a wrong has been done, a wrong has been done – small or big. Irrespective of political affiliations/sides.

Ms Phang is Betty’s crony. She got a massive deal for a tamn manggis land which the committee diasproved but due to her backdeal she got it magically “approved” wt da help frm the chinese Rosmah aka Betty

S Lee,

Section 165 as you rightly pointed out states

“… obtaining a valuable item without consideration from a person. …”

Notice that the section didn’t state “obtaining a valuable item without ADEQUATE consideration from a person. …”

Any junior lawyer worth his salt will tell you that LGE have 2.8 million considerations. ….

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