How burial plots became condo units
08/09/2008 The Sun by R. Nadeswaran and Terence Fernandez

PETALING JAYA (Sept 08, 2008): The saga of the cemetery land started way back in 1986 when Bandar Utama was being developed. The rubber and oil palm trees of Ephingham Estate belonging to the See Hoy Chan Group were being cut down to make way for a new township. The master plan was being prepared and requirements for public amenities were incorporated and approved.

However, someone forgot about a place for the dead. Thus, the state acquired part of the land measuring 17ha and offered a compensation of RM3.25 million.

Twelve years later, the dormant files began to move. Petaling Jaya Municipal Council (MPPJ) councillors vividly remember the debates over the change of the land use.

After all, burial grounds, like other facilities meant for the public, came under the council’s purview. But those who pushed for status quo were outnumbered. The new plans to "bring development to the people" must be implemented, the majority said, and approved the project on Aug 25, 1999.

But four months earlier on April 1, 1999, the state government alienated the land to Nayaka (M) Sdn Bhd, a company with a paid-up capital of RM1 million.

Oddly enough, a Company’s Commission search revealed that Nayaka’s last statement of accounts was for the financial year ending Dec 31, 1998, which showed it was RM6,625 in debt.

Nayaka’s principal shareholders and directors were Muhammad Nadzri Baharom and Kamarudin Mohd Idrus, who gave their residences as Sungai Kantan, Kajang, and Taman Danau Kota, Setapak, respectively.

The state’s alienation fee was a princely sum of RM11.24 million – giving the Selangor government an immediate profit of RM7.99 million. (It paid Damansara Jaya RM3.25 million for the cemetery.)

That was not all. Another condition of sale was that the company would build 480 units of low-cost flats which would cost about RM20.16 million.

On Dec 28, 1999, Nayaka entered into a joint venture agreement with Cekap Corporation Bhd, a subsidiary of Metro Kajang Holdings Berhad, to develop the land.

These facts were contained in a circular dated June 27, 2000 to shareholders of Metro Kajang Holdings, to get their approval for the joint venture. It was noted that there would be 5,077 units of mixed development – housing and commercial units of which the 480 low-cost units comprise less than 10% of the project.

"Given the strategic location and affordable pricing, the project is expected to be very successful. Barring any unforeseen circumstances, the project is expected to take eight to 10 years to complete and is expected to generate (at current price levels) a total sales volume of about RM510 million with a development cost of about RM450 million," the circular said.

"As at to date, earthwork is in progress on the land … there are some squatters on the smaller parcel of land … And the state government and Nayaka shall be jointly responsible for the relocation of the squatters."

According to the circular, the salient points of the joint venture were:

» Cekap will undertake the development at its own cost, including payment of land premium;

» Cekap will pay Nayaka a development premium of RM8 million;

» Cekap will pay Nayaka an entitlement 0.5% of the gross aggregate value of the project;

» Nayaka will execute an irrevocable Power of Attorney in favour of Cekap to do with all matters relating to the project and sale of the units;

» Cekap to provide a performance bond of RM1 million in favour of Nayaka for the construction 480 units of low-cost flats.

Metro Kajang argued that the rationale of the joint venture was "in line with the group’s policy of expanding its core business in property development to enhance earnings".

The circular, however, did not state how Nayaka came into possession of land which was acquired for a cemetery.