THE RM2 billion received from buyers shows that Forest City condominiums can be bought by anyone, said its developer, denying that Chinese nationals are getting one-for-one deals.

Rebutting allegations that units in the multibillion-dollar project are being handed out for free to Chinese investors, Forest City’s official spokesman, Ng Zhu Hann, said the RM2 billion deposited into the project’s Housing Development Account (HDA) proves that the transactions were done in Malaysia.

“It means the money was from purchasers of the properties, and the transactions were done in Malaysia. Otherwise, there’s no way there would be money in the HDA… it’s not something that we can put in there.

“Each buyer is required by the Housing Development Act to put a sum into the account, (so that) in the event there are problems with the project, the government can take over,” said Ng, who is director of strategy for Country Garden Pacificview Sdn Bhd (CGPV).

He added that Forest City has explained the matter to the Housing and Local Government Ministry, which has, in turn, verified the information.

Ng told The Malaysian Insight that it was impossible for such transactions to occur without being flagged by auditors years ago.

“Country Garden Holdings, the parent company, is listed in the Hong Kong stock exchange. So if you talk about CGPV, which is the master developer of Forest City – they’re actually two separate entities. There’s no way we can, say, buy a product in China and you get one free.

“There are two different accounting standards – there are two different books that will be audited, and most importantly, they are two different businesses, in different regions. Plus, CGPV is a joint venture with the Johor government. It’s not a full entity owned by Country Garden.

“So, there’s no such thing as a ‘related-party’ transaction. There might be transfer-pricing issues, which auditors would have flagged years ago. So, (the allegations) do not have any truth to them.”

Economic Affairs Minister Mohamed Azmin Ali previously said there was a deal that would see all financial transactions related to the sale of properties in the project going to the Chinese government, and not the Malaysian Treasury.

“There is a special programme where if you invest a certain amount of money in China, you get a free unit in Forest City.

“So, certainly, we cannot allow that as they pay taxes in China, and the transactions were done in China. It does not benefit us,’’ he was quoted as saying.

The massive 1,386ha Forest City project has come under increased scrutiny since the change in government following the May 9 general election.

In an interview with BBC’s Hardtalk, Prime Minister Dr Mahathir Mohamad was asked if he is against Chinese people settling in Malaysia.

“No country wants the citizens of another country to come and settle en masse,” he said on the programme.

After his working trip to Beijing, Dr Mahathir told reporters that foreigners will not be allowed to buy residential units in Forest City.

Following the comments, the Prime Minister’s Office released a statement, saying Malaysia imposes certain conditions on properties purchased by foreigners, irrespective of their nationality, and that the purchase of properties does not guarantee automatic residency in the country.

Ng said the reason why a large proportion of Forest City’s buyers are Chinese is because Country Garden, being a Chinese company, naturally turns to Chinese citizens first as its investor database.

He said the developer’s latest figures showed that 70% of the buyers are from China, Hong Kong, Taiwan and Macau, 20% from Malaysia and Singapore, and the remainder from 22 other countries.

However, this is likely to change, he said.

“In terms of why the proportion of buyers from China is more significant… it is because Country Garden is the biggest developer in China. So, their database, naturally, is from their ‘home countries’, which are these four places – China, Taiwan, Hong Kong and Macau.

“Forest City is at its infancy… it is just over three years… So, for a project at its infancy, predominantly at this point in time, the segment may be skewed towards a certain demographic. In the very near future, this demographic will reduce, and change.”

He said the developer, seeking to diversify its target markets, has set up sales galleries in nine countries. Malaysia has 13 such galleries.

“There is no way Forest City can rely solely on a country from a single demographic. (If that were the case,) then you are not a global metropolis, you are not an international market. You are just a market for a particular country or nation. That was never our plan. We never planned to build a Chinese enclave here.”

Forest City, a US$100 billion (RM400 billion) mega project in Johor, is being developed by CGPV, a joint venture between the Guangdong-based Country Garden and Esplanade Danga 88 Sdn Bhd.

Country Garden owns the majority stake in CGPV through Malaysian subsidiaries, while the remaining stake is owned by the Johor government, state ruler Sultan Ibrahim Sultan Iskandar and his associates. – October 7, 2018.