UK’s biggest property deal in jeopardy as Malaysia announces investigation into £1.6Bn purchase

A proposed £1.6bn sale and development of the former Battersea Power Station could be in jeopardy.  The sale of the development to Malaysian funds,  Permodalan Nasional Berhad and the Employees Provident Fund of Malaysia, has been called into question by the leader of Malaysia’s governing coalition, who announced an investigation following reports of “dubious” investments it says were made by the previous administration.

Between them, the fundholders already own a 70 per cent stake in the project to develop the power station and the 42 acres surrounding it, through their stakes in developers SP Setia and Sime Derby.  The full purchase of the Power Station would give them direct ownership, but Anwar Ibrahim, who leads the recently elected Pakatan Harapan, said recent deals paid for by Malaysian sovereign funds and pension funds had to be investigated following accusations that the previous government had misused savings of ordinary people to cover up an alleged multibillion-dollar embezzlement scandal at 1MDB, a state investment fund.

Anwar Ibrahim told the Guardian:

“All these deals which are considered dubious, including investments in housing in London, will have to be investigated. Yes, that includes Battersea. Because they were made using state funds. We have to be convinced that this was the right investment decision and that there was no political influence or direction [within Malaysia],” he said.

“It’s clearly a political decision to invest. If there is something wrong then we will want to renegotiate. We are looking at umpteen deals extending to hundreds of billions of ringgit – that is tens of billions of dollars.

The current Malaysian government believe more than $4bn (£3bn) could have been stolen from a government fund, and claim an alleged $681m ended up in Former Prime MInister Najib’s personal bank account.

 

The planned Battersea project is 17 hectares (42 acres), with more than 4,000 new homes planned for the new development.  Anwar questioned why the British Government had not led it’s own investigation, saying:

“There was no attempt by British authorities to investigate – but this was a crime using sovereign wealth funds for reckless spending sprees. I am seeking support from the British government and from the foreign secretary, Boris Johnson,” he said.

The UK  Government defended its practices in a statement saying:

“The UK has a robust legal and regulatory framework which enables effective investigation of suspected money laundering, corruption and the recovery of illicit assets, and we continue to work closely with international partners to stem the flow of illicit wealth.”

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