LIM Guan Eng had set the purchase price for the Jalan Pinhorn bungalow with its owner Phang Li Koon earlier than 2015, the court heard today.

The prosecution said the property was valued at RM4.27 million at the time of purchase in 2015.

A former Citibank sales manager Lim Wern Shern told the Penang High Court that the Penang chief minister first approached the bank to apply a RM2.1 million loan in 2013 to finance the purchase of the bungalow.

He said he was contacted by Guan Eng’s wife Betty Chew about the loan application in August 2013 and the paperwork was signed by Guan Eng shortly later.

However, the client did not proceed with the application, he said.

“On June 5, 2015, Chew contacted us again to proceed with the loan. I met her at her office and informed her that a new application must be made,” he said.

Wern Shern said Guan Eng then signed for the second loan application for the same amount – RM2.1 million, which was 75% of the value of the bungalow, later that month and his application was approved in July 2015. 

Guan Eng would repay the 15-year loan with RM16,172 a month, he said. 

Wern Shern, who worked for Citibank for five years until November last year, is the prosecution’s 12th witness in Guan Eng’s graft trial over the purchase of the Jalan Pinhorn house, which Phang sold to him at RM2.8 million in 2015.

Guan Eng is accused of using his position to obtain gratification for himself and his wife Betty Chew by buying the bungalow from Phang below the market price.

The prosecution is saying the property was valued at RM4.27 million at the time, and will present evidence that Guan Eng had bought the property while knowing it was below the market price and that Phang had connection with his official functions as chief minister.

The offence under Section 165 of the Penal Code comes with jail of up to two years, fine or both upon conviction.

Phang is charged with abetting Guan Eng under Section 109 of the Penal Code, which is read together with Section 165 of the Penal Code. She faces the same punishment upon conviction.

During cross examination, Guan Eng’s lawyer Gobind Singh Deo verified with Wern Shern whether he had knowledge and experience in sales and purchases of properties. Wern Shern answered yes.

“When people buy houses, they usually negotiate and agree on the prices before they enter into sales and purchase agreements.

“Buying properties is not the same as shopping at the market where you pay straight away take the goods and settle then and there, right?

“By operation of the law, certain things must be done before the formalisation of the S & P which would require time. It usually takes six to eight months, or even a year. Do you agree?” Gobind asked Wern Shern.

The witness said yes.

The lawyer then asked Wern Shern about the process to determine the duty for the properties involved in the sales and purchases.

“After the S & P is formally legalised with both parties signed, the valuation department will check the value of the property,” said Wern Shern, who now works as a certified financial planner at AIA Bhd.

Gobind then asked: “The time between the setting of the price of the property and the date of the valuation on the property can be far different. So the prices will also be different, right?

“In this case, you met Chew in August 2013. It means the price of the bungalow would have been agreed (by the parties involved) earlier than that. You agree?”

Wern Shern said yes to both questions.

He also answered yes when Gobind asked whether Guan Eng’s loan and the purchase price for the Jalan Pinhorn bungalow had remain unchanged in August 2013 and June 2015 when the chief minister applied for the loan to buy the property.

Today is the second day of Guan Eng’s graft case before judge Hadhariah Syed Ismail. The prosecution led by Masri Mohd Daud is calling 14 witnesses today.

Guan Eng is also facing another charge under Section 23 of the Malaysian Anti-Corruption Commission Act.

He was accused of using his position to obtain gratification for himself and Chew by approving an application by Magnificent Emblem to convert agricultural land to residential use during a state planning committee meeting on July 18, 2014.

Phang, Guan Eng’s former landlady, was a director at Magnificent Emblem. – March 27, 2018.