Lim Guan Eng’s critics have said that his case and that of former Selangor menteri besar Mohamad Khir Toyo are similar.
Khir Toyo had failed to convince judges that his bungalow was purchased based on a “willing buyer-willing-seller” basis and was jailed for 12 months in 2015. Therefore, Lim should be sentenced to jail too, they argue.
However, both cases are different.
If Lim were an ordinary citizen, he would not have gotten the attention (and trouble) he has been experiencing. In fact, nobody would care that he had struck a good deal getting himself a bungalow for RM2.8 million – a huge discount off market value. At 10,161 square feet, his bungalow in Jalan Pinhorn, Penang, was a steal at RM276 per square foot.
Unfortunately, Lim is no ordinary Chinaman but was the Chief Minister of Penang and is the leader of a party that commands 90% of Chinese votes. Therefore, when he purchases or sells an asset, the price must be precise, not below or above market price.
If he buys real estate “below” market price, then he is being rewarded for using his position to help the sell in some way. If he buys a property “above” market price, then he is cleaning dirty money through money-laundering. That’s how the perception game is being played. Heads he loses, tails he also loses.
Apparently, the seller of the bungalow Phang Li Koon signed a Statutory Declaration (SD) to relieve pressure on Lim. It seems she’s a great admirer and supporter of Lim, and also a close friend of his wife Betty Chew. So, it was a “goodwill sale” after the Lim family rented the bungalow since 2009 at RM5,000 per month.
Lim claimed that he had bought the bungalow on a “willing buyer-willing-seller” basis. After all, it was a 30-year-old bungalow with no swimming pool, as he was quick to point out. He took a bank loan of RM2.1 million and paid the remaining RM700,000 in cash based on his income as the chief minister and an elected representative.
Loss vs profit
Compared to Khir Toyo’s case, Ditamas Sdn Bhd director Shamsuddin Hayroni bought his bungalow at RM5 million, excluding renovation cost of RM1.5 million, but sold the renovated property to Khir Toyo at the lower price of RM3.5 million. Thus, Shamsuddin suffered a 46% loss.
Phang, however, bought her bungalow in 2008 for RM2.5 million and sold it to Lim for RM2.8 million. She sold it at a 12% profit.
Fear of loss of favour vs harassment and stress
Shamsuddin admitted that he had sold his two plots of land and a bungalow at a price of RM3.5 million to Khir Toyo for fear of jeopardising his housing projects in Selangor.
Phang signed an SD and admitted she sold her property out of fear of constant harassment and stress from Barisan Nasional.
Unwilling vs willing seller
Shamsuddin admitted he personally did not agree with the RM3.5 million price wanted by Khir Toyo and told him the property should be at least between RM5 million and RM5.5 million.
Phang was honoured and happy to sell her bungalow to Lim and his family for RM2.8 million.
Business vs non-business relationship
By his own admission, Shamsuddin had a business relationship with Khir Toyo through PKNS. In his capacity as PKNS Chairman, Khir Toyo had admitted to giving a letter of support to Shamsuddin, who bids for PKNS projects.
Phang, through her SD, and Lim announced they have no business relationship whatsoever. In her SD, she denied the allegations of being a director or shareholder of KLIDC which has successfully bid for the Taman Manggis land. Additionally, the Taman Manggis land was sold for RM11 million through “open tender”, not to mention Lim was not part of the tender committee.
It would have been extremely foolish of Lim, an accountant, to get himself embroiled in corruption with the purchase of the bungalow, knowing the MACC and the rest of the government were watching his every move.
Khir Toyo was found guilty primarily because the courts did not look kindly upon the fact that the property was bought by him at a lower price, compared with the much higher price paid by Shamsuddin Hayroni. So the keywords here are purchase price and selling price, not market price.
Phang may not have reaped a handsome profit, but she made a decent RM300,000 on her investment of RM2.5 million on the property.
There is no law that says one cannot sell real estate at below “market price”, as long as one does not sell it at a loss – below “purchase price” – without a compelling reason. There’s little doubt that “willing buyer-willing-seller” applies to Lim’s bungalow transaction but not Khir Toyo’s.
And with that, we rest our case.
Earlier report: Sept 4, Facts of the Guan Eng Acquittal