Mega tower will affect PNB unit trust holders, says Mahfuz

Mahfuz: Whether we want it to or not, it will involve money from these schemes and the value of returns of its investments which should be paid out as dividends to unit trust holders... this is their money.

KUALA LUMPUR, Oct 21 — A Pakatan Rakyat (PR) backbencher told Parliament today that Permodalan Nasional Bhd (PNB) would likely have to scrimp on dividends paid out to its unit trust holders to fund the RM5 billion 100-storey Warisan Merdeka tower.

In his debate speech on Budget 2011, Datuk Mahfuz Omar (PAS-Pokok Sena) said dividend payments could be affected although PNB had claimed that money for the project would come from profits made through private investments.

“I would like to remind PNB that the total value of its unit trusts from Amanah Saham Nasional Bhd (ASNB), Amanah Saham Bumiputera, Amanah Saham 1 Malaysia and others, is RM115 billion.

“Meaning that PNB’s profits is actually profits made from its investment of the RM115 billion,” he explained.

PNB is Malaysia’s biggest fund management company and operates a number of unit trust schemes.

He added that it was doubtful that PNB had a larger fund other than that collected through the unit trust schemes.

“I would like to stress here that this means it will directly and indirectly involve money from the unit trust schemes.

“Whether we want it to or not, it will involve money from these schemes and the value of returns of its investments which should be paid out as dividends to unit trust holders... this is their money,” he said.

Mahfuz told a press conference later that it was “unfair” to use public money to construct the 100-storey tower, which many have predicted would eventually turn into a white elephant.

The PAS MP added that it was redundant for the government to build the iconic tower with its sights set on turning Kuala Lumpur into a world-class city when even Naza TTDI, the property arm of Naza Group, had already expressed its intention to construct a similar tower, touted to be 100-storey high or more.

Last December, it was reported that Naza TTDI would build an iconic tower on a 25ha site near the proposed Matrade Centre here.

However, the tower’s height was yet to be finalised and the group’s managing director SM Faliq SM Nasimuddin was quoted as saying that it would depend on the amount of investments it could secure.

“If they get the land, they will build it and this means we will have one tower already,” said Mahfuz.

He pointed to the current property glut in the country and how Malaysia would have an excess of 115 million square feet of office space by the year 2014.

“This is excluding the PNB tower and Naza’s tower. So now we have an excess of office space although demand has dropped significantly,” he noted.

Mahfuz added that even Menara Citibank had lowered the rental rate for its office space from its original over RM7 for each square feet to between RM6 and RM6.50.

“This lowering of rate shows that the demand has dropped so much that they were forced to do it,” he said.

Mahfuz also suggested to House earlier to form a special parliamentary committee to study the matter as well as to examine all proposals by the government for the construction of mega projects.

“These mega projects should go through an approval process before they are started. If all committee members agree with the projects then they can be approved,” he said.