The central bank said the land would be used for the relocation of the Global Islamic Finance University (INCEIF) and the International Shariah Research Academy for Islamic Finance, and as an educational hub for the financial services industry.
“And, to be clear about it, it was not the government that wanted to sell the land to us. We actually approached the government many months ago to buy the land,” BNM governor Muhammad Ibrahim told The Edge Financial Daily on the sidelines of an event in Siem Reap, Cambodia.
BNM announced the acquisition of the land on Jan 4. It was the subject of controversy as the deal was carried out around the time that 1MDB, a wholly-owned unit of the Minister of Finance Inc, was required to make a final payment of about US$600 million to International Petroleum Investment Co (IPIC) PJSC.
1MDB announced on Dec 27 that it had paid the amount owed to IPIC in full, ahead of the Dec 31 deadline.
1MDB in its press statement last year said the cash it had paid IPIC was from the proceeds of its ongoing rationalisation programme. However, it did not reveal details of how it had raised the cash for the payment, The Edge Financial Daily report said.
When asked to comment on the matter, Muhammad said: “That is the government’s business (on how it uses the proceeds). It’s best to ask the government, not us. As far as we are concerned, we wanted to buy the land for our own development.”
The Edge Malaysia weekly previously reported that it was rare for a government agency to buy land from the federal government, adding that the transaction was done at market price.
The report cited observers as questioning why BNM had to pay market price for the land when it was to be used for educational purposes.
The government previously transferred land to public universities at minimum cost. At RM2 billion, the price of the 2.43 million sq ft parcel works out to RM823 psf.
Muhammad also said it was not out of the ordinary for BNM to acquire land.
“The acquiring of land is nothing new to us. We have acquired many (tracts of) land over many decades. It’s not as if it’s something that we have done for the first time.
“And when we acquire land, we acquire at market (value) and hence, we make sure that it conforms to the best market practices and norms.”