The report said this affected UDA’s cash flow, preventing the company from continuing with other development projects and embarking on land purchases.

“UDA also has commitments to repay financing facilities amounting to RM500 million to financial institutions and repayment of government loans made for property development,” it said.

The report said the SPV, which was created as part of a joint venture with another company to develop the land, was supposed to purchase the 8,973 square metre plot from UDA for RM374 million.

It had agreed to pay 10% of the selling price upon signing the purchase agreement with UDA in June 2014, with the remaining 90% to be paid once other pre-conditions under the agreement were fulfilled by both parties.

The report found that the SPV failed to fulfil some of the pre-conditions set 10 months after the agreement was signed, after which it requested for a time extension from UDA to fulfil them.

After the UDA board approved an extension to February 2016 with a 4% interest charged per year, the partner company (on behalf of the SPV) continued to request an extension to pay the remaining 90% of the selling price amounting to RM336.6 million.

UDA has informed the audit department that it has hired a solicitor to begin legal proceedings on the matter, adding that notices of demand have been served to both parties.

Overall, the report said, the joint venture had caused UDA losses amounting to RM143.55 million since 2018, adding that legal action could help protect the government’s interest and UDA’s image as a property developer.

The losses included loss of income from mall, parking and exhibition space rentals, and costs for office rentals and relocation to Pertama Complex, and the cost of selling Bukit Bintang Plaza.