Indonesian tycoon not keen on 1MDB property project

Indonesian tycoon Peter Sondakh.
Indonesian tycoon Peter Sondakh.

KUALA LUMPUR - Indonesian tycoon Peter Sondakh said his conglomerate Rajawali Group is not interested in investing in a mega property project on land owned by 1Malaysia Development Berhad (1MDB).

This comes amid speculation that he might be roped in to inject fresh capital to help the state investment fund.

Mr Sondakh, who has close ties with Malaysian Prime Minister Najib Razak, said he will not invest in 1MDB's Tun Razak Exchange (TRX) project as the Rajawali property portfolio is full.

"I am not interested in TRX," the Rajawali chairman and chief executive officer told The Star daily.

"We have enough property business in Malaysia and our portfolio for property is fully utilised... Maybe other things but not property," he said.

TRX, a planned financial centre in Kuala Lumpur, is seeking foreign investors as part of 1MDB's strategy to reduce its debts of about RM42 billion (S$15 billion).

1MDB is wholly owned by the Malaysian Finance Ministry. Mr Najib, who is also Malaysia's Finance Minister, is chairman of its board of advisers.

Speculation about Mr Sondakh's involvement in TRX arose following a proposed deal announced last week to sell Rajawali's palm oil and sugar cane plantations in Indonesia to Malaysia's Felda Global Ventures (FGV) for US$747 million (S$1 billion).

Under the deal, FGV is to get a 37 per cent stake in Rajawali's PT Eagle High Plantations and sugar cane plantations, to be paid largely in cash.

FGV has been criticised in Malaysia for paying a high premium for the stake in Eagle High Plantations, which owns palm oil plantations.

Mr Sondakh, 63, in the interview, rebutted allegations that the deal was overpriced. He said shares in Eagle High Plantations were hard to come by and Indonesian plantation firms were not easy to acquire.

When asked about his relationship with Mr Najib, Mr Sondakh said: "Yes, we are friends." He then rattled off a list of other world leaders he said he knew. "We don't get special treatment in Malaysia."


A version of this article appeared in the print edition of The Straits Times on June 25, 2015, with the headline 'Indonesian tycoon not keen on 1MDB property project'. Print Edition | Subscribe