IN April last year, a parcel of land in the heart of the capital was bought by Lembaga Tabung Haji (TH) from the troubled 1Malaysia Development Bhd (1MDB) at RM188.5 million. On account of this association with the beleaguered strategic development company, all hell broke loose when information leaked out as to the sale and purchase of this parcel of land. TH depositors were bombarded and terrorised with conspiracy theories, and the reputation of TH management’s investment ability took a beating, from which it has yet to recover; such is the effect of mud when flung. To avoid further defamation, the TH management agreed to sell off the land immediately.
Fortunately, the resale did not take off. For, controversial though the purchase was, today, it has proven to be a prudent investment. The 0.6ha of the Tun Razak Exchange (TRX) is now worth RM250 million. TH’s purchase rate may have been many times over that sold by the government, but, a piece of land in the heart of the city can only appreciate over time; so, there would never have been the risk of a loss being made. The positive reverse, in fact. Government land banks are not easily unlocked; least of all ones in the very centre of the city are not easily unlocked. Any developer would have been lucky to have got their hands on it. So, the knee-jerk reaction to sell it off would have made the least sense — an attempt to appease emotional yet uninformed constituents, but lacking in economic sense, at the end of the day. TH invests its members contributions in a wide range of real estate, and has done so successfully for years. Had there not been a controversial seller, the very same investment into TRX would not have made even a ripple.
Moving on, that piece of land will be developed into top-end, high-class residential apartments valued at RM820 million, and, naturally, will rake in much more. Given TH’s record in property development, there is no reason to doubt that the project will take off well. For, much wisdom is needed to run a strictly Syariah-compliant fund. Profit alone cannot be the motivating factor. Investments made must not breach what is prohibited in Islam, no matter that it rakes in many multiples of the original capital ploughed in. To not be vigilant in this respect is to taint the purity of the funds that will take pilgrims to Mecca and the consequences of imprudence, let alone a crime, will follow the decision-maker to his grave. Such is the gravity of the trust placed on the TH management and the weight of retribution facing them.
One can then, only applaud the decision to buy into the TRX development. By so doing they have preserved at least 0.6ha of TRX land holding in Malaysian hands. Furthermore, it is well known that foreign investors find Malaysia amenable because of the many public funds available to ameliorate problems arising during hard times. And, this is a prime example of Malaysia’s ability to maintain the economy’s resilience. Additionally, Malaysia’s many public funds have the capacity to outbid private capital and prevent fire sale conditions on the country’s prime assets. Is this not astute economic leadership?