CONSPIRACY OF TAX EVASION AND LAND VALUATION MANIPULATION IN PENANG?
Could Penang CM YB Lim Guan Eng Bungalow Scandal be just the tip of the iceberg on major land scams in Penang. Possibility of tax evasion and influencing land valuation in the state.
On October 2008, one Phang Li Koon bought a bungalow at No 25, Jalan Pinhorn, about 7 months after Lim Guan Eng was appointed the Chief Minister of Penang. Ms. Phang Li Koon paid RM 2.5 million.
Phang Li Koon then extensively renovated the bungalow said to run into hundreds of thousands ringgit before renting it to Lim Guan Eng. The purchase cost together with the cost of extensive renovation would have pushed total outlay by Phang to above Rm 3 million.
In July 2009, CM of Penang, Lim Guan Eng decided to become a tenant at Phang Li Koon's bungalow with a monthly rental fee of RM 5,000 and later purchased it in 2015.
My first question to Lim Guan Eng, did he conduct a due diligence before making a decision to rent and later to purchase Phang Li Koon's bungalow since Phang Li Koon has extensive business dealings in Penang as this will be constructed as a conflict of interest? This clearly goes against Lim Guan Eng's slogan of C.A.T (Competency, Accountability, Transparency)
My 2nd question, to Lim Guan Eng, why would Phang sell a house that cost her Rm 2.5 million in 2008 to him for Rm 2.8 million in 2015 when market value is about Rm6.5 million. She can't be that silly. Considering that together with the cost of extensive renovation and holding cost, Phang would be selling her house to Lim Guan Eng at a loss. Who in their sane mind would do that.
I am not a tax expert but It has to be remembered that on 1 January 2010 RPGT Tax exemption was revoked by the government. Therefore, any property that is disposed within the first 5 years of purchase/acquisition is subjected to RPGT.
Could Phang have purchased the house in trust for Lim Guan Eng in return for business favours involving Penang Government.
Hence by selling the bungalow in 2015 (more than 5 years) after purchase, Phang avoided paying RPGT to the government.
So the story that he did not purchase the house in 2012 on not being sure of being reelected as CM does not gel. He was reelected in 2013 hence why wait 2 years until 2015 to purchase. Clearly the purchase was avoided in 2012 to avoid Phang paying RPGT. So she held on to the house and then sold it to Lim Guan Eng after the 5 years period to avoid paying RPGT.
Now generally in Penang's prime area there could be a difference of between 6% to 10% between state government and private valuation. ( Also this house purchase was not a government acquisition ).
But in the case of Lim's Bungalow, the difference between private valuation and state government valuation was nearly 35%. Was there influence on the state government valuation department to make such a drastically low valuation?
One does not have to be a rocket scientist to recognise there is something shady going on.
The important question is, how many more of such deals with cronies have happened in Penang under Lim Guan Eng. Is this the tip of the ice berg on land scams worth billions of ringgit in Penang. There have been various allegations involving land deals worth billions of ringgit in Penang under DAP government.
I call upon the authorities to investigate all Penang land deals done under the leadership Lim Guan Eng. These scandals must be investigated by the authorities without fear or favour.
DATO SERI S.VELL PAARI
MIC CWC MEMBER