IT will not be an easy, straightforward process for Felda to regain ownership of several plots of land in Jalan Semarak from developer Synergy Promenade Sdn Bhd.

Lawyer Azhar Harun said despite Felda chairman Shahrir Samad’s announcement yesterday that Synergy Promenade would return the land to Felda through a mutual agreement, the legal process could prove to be complicated and messy. 

Yesterday, Shahrir said Synergy Promenade had volunteered to return to Felda at no cost the ownership of 16 plots of land, totalling 66,000sq m. Shahrir said the developer had also returned the relevant documents for the land to be registered again in Felda’s name. 

“It depends on what Synergy Promenade has done on the land,” Azhar said when contacted today.

There were four scenarios that could play out, he said.

In the first scenario, Synergy Promenade may have taken out a loan or a financial facility for the land. 

“If they have charged the land to the bank, then the transfer will be a bit complicated because the charge given to the bank must be discharged first. Only then may Synergy Promenade transfer the title to Felda.”

In the second scenario, the charge is not discharged but the transfer is made subject to the charge. 

“Synergy Promenade may say they are transferring the land to Felda, but the land is still charged to the bank for financial facilities or loans taken out by the developer. So the charge will still be in existence and Felda now owns the land subject to the charge,” Azhar said. 

In such a case, should Felda fail to service the loan or financial facility, the bank can auction off the land and take foreclosure proceedings. 

The third scenario involves Synergy Promenade having already sold properties built on the land to third-party purchasers.

“This one will be very complicated. Synergy Promenade has built all these properties and we assume they’ve sold some of them off. The situation will depend on whether the new owner or owners have caveated their land to protect their interests,” Azhar said. 

“If that is the case, the re-transfer cannot go through unless the caveats are withdrawn or  the people who have caveated the land give their consent.”

The situation becomes even more complicated if a purchaser has taken out a loan to purchase a unit and has charged the bank to secure the land. “

In this case, it is the bank that took the charge who must consent.

“Either the charge is released by the bank and the transfer can be done or the charge is not released and therefore the ownership would be subject to the charge. These are the complications that may arise,” Azhar said. 

In the fourth scenario, the land has not been charged by Promenade and nothing has been done on the land.

“Then the re-transfer can be done cleanly because no interest has been created on the land,” Azhar said.

This scenario is unlikely, however, he said.

Azhar said in most development situations, the land is not transferred to the developer. “The developer is supposed to develop the land and obtain the finances to carry it out.”

“This here is quite an unusual case where the land ownership was transferred,” Azhar said. 

It was reported that ownership of the land belonging to Felda was transferred via a dubious transaction in 2015, of which the Felda board members claimed to have no knowledge.

Felda reportedly did not receive any money from the transfer of the land, which is estimated to be worth RM270 million.

Seven projects, including the iconic Felda tower being developed by Kuala Lumpur Vertical City (KLVC), are involved.

“Frankly speaking, I’m quite skeptical as to why this issue has suddenly surfaced 11 months after the new chairman discovered it last February. Why was it concealed and not revealed for 11 months, and now that we are nearing the elections, the problems are solved within two weeks?

“I’m skeptical of this so-called revelation and wonder whether it is an election gimmick,” Azhar said. 

On January 5, former Felda chairman Isa Samad gave a statement to the police investigating the land transfer deal.

A forensic audit into the KLVC project started on January 8 and is expected to wrap up ahead of the 30-day deadline.

Felda chairman Shahrir Abdul Samad said all the necessary documents had been handed over to the external audit firm appointed by the Prime Minister’s Department. – January 16, 2018.