Ousted BN govt's land swop deals draw scrutiny

Defence ministry lost $164m in deals, with some camps allegedly built to boost voter numbers

These deals, carried out by Barisan Nasional, have raised questions about bad governance, depressed land valuation and inflated project prices handed to underqualified firms.
These deals, carried out by Barisan Nasional, have raised questions about bad governance, depressed land valuation and inflated project prices handed to underqualified firms.PHOTO: THE STAR/ASIA NEWS NETWORK

Malaysia's Defence Ministry (Mindef) lost RM500 million (S$164 million) in land swop deals carried out when the Barisan Nasional (BN) coalition was in power, as 16 plots totalling 1,183 ha - more than twice the size of Sentosa island - were valued at RM5 billion but sold for less to favoured companies.

The land was sold to firms tasked with building new camps and other military facilities at locations decided by the ministry, whose inner workings have long been guarded under the guise of national security.

These deals, carried out from the 1990s, have raised questions about bad governance, depressed land valuation and inflated project prices handed to underqualified firms.

But the real abuse, official sources say, is that several military camps were built solely to rig elections by placing the camps in constituencies contested by senior BN figures and boosting the votes garnered by these politicians.

"The amount (lost) is very small compared with 1MDB-level scandals but that is what a graft investigation has to focus on," a top ministry official told The Straits Times, referring to the state fund controlled by former premier Najib Razak, which saw billions of dollars unaccounted for. "But if you study the strategic interest, then you will see how far Mindef was abused to help top BN politicians."

The executive summary of the report on the scandal was tabled in Parliament last week by the Governance, Procurement and Finance Investigating Committee (GPFIC).

The committee stated that "political considerations outweighed government interest" in 13 of the 16 cases probed, where "the involvement of members of the administration, that is the prime minister and defence minister, is clear".

  • More dubious deals being probed

  • The Malaysian government is exploring other dubious deals at the Ministry of Defence as a follow-up to the shocking abuses in the defence land swops.

    The Straits Times understands that probes into corrupt procurement deals are ongoing and due to be made public in the second half of the year.

    An aide to former defence minister Hishammuddin Hussein and top executives in the business empire of politically connected tycoon Syed Mokhtar Albukhary were arrested in recent weeks to help in graft investigations.

    The world is aware of the high-profile case involving the RM6 billion (S$2 billion) purchase of Scorpene submarines from France in 2002, when former premier Najib Razak was defence minister.

    In that deal, his then associate Abdul Razak Baginda had received more than RM130 million in fees as a consultant.

    A government source has told The Straits Times that it is currently probing the purchase of more than RM300 million worth of helicopters from an American firm, as the deal was inked and partially paid without due diligence.

    Shannon Teoh

The GPFIC, after checks with the Election Commission, confirmed that at least four military camps were built to shift voters before last year's election.

These involved constituencies won by then Deputy Premier and current Umno president Ahmad Zahid Hamidi (Bagan Datuk ward in Perak), then Defence Minister Hishammuddin Hussein (Sembrong, Johor), as well as then Rural Development Minister and now acting Umno deputy president Ismail Sabri Yaacob (Bera, Pahang).

A fourth camp saw nearly 1,000 soldiers moved into Johor's Segamat constituency, which then Health Minister S. Subramaniam failed to defend last year.

In Malaysia, uniformed personnel, such as the police and armed forces, along with their immediate families, vote in wards where their quarters are located.

Just like other government employees, they had overwhelmingly voted for BN.

"The construction of these camps were based on the political interests of members of the administration... and not military strategy," the GPFIC said.

It added that Datuk Seri Hishammuddin's political secretary had even issued a memo stating "priority must be given to the Paloh Camp" in Sembrong, to the point that a letter of instruction was issued "to begin construction without any contract signed".


A military source told ST that the haphazard way projects were chosen and financed via land swops resulted in the army's Tebrau base in Johor being ill-maintained, while other facilities in the state, such as the new camps in Sembrong and Segamat, took priority though they are far inland.

"As a result, we don't have fighting assets in the south," the source said, referring to the delay in completing a new Skudai camp that soldiers in Tebrau were supposed to move to.

A project in Johor's Skudai area and several others were first initiated in the 1990s, leading Najib to claim that "the biggest losses and the most blatant infringements" happened when Tun Dr Mahathir Mohamad was prime minister in charge of the BN government.

And Mr Hishammuddin has challenged his successor, Defence Minister Mohamad Sabu, to prove his guilt.

"The ministry will upload detailed reports on the 16 land swop cases of over 500 pages over (the) coming days. Then we leave it for the public to judge," Deputy Defence Minister Liew Chin Tong told ST when asked to respond to these claims.

A version of this article appeared in the print edition of The Straits Times on May 16, 2019, with the headline 'Ousted BN govt's land swop deals draw scrutiny'. Print Edition | Subscribe