LIM Guan Eng’s former landlady, Phang Li Khoon, took out a loan of more than RM2 million in 2008 to buy the Jalan Pinhorn bungalow in Penang, which is now owned by the chief minister.

Public Bank northern region manager Choong Sung Yean said the bank had approved Phang’s application for the loan, and informed her about it in a letter dated September 5, 2008.

She said the loan was to finance the purchase of the bungalow at No. 25, Jalan Pinhorn in George Town.

“At the time, the registered owner was Ming Holdings (M) Sdn Bhd, and the title was then transferred to Phang,” she told the Penang High Court today.

She is a prosecution witness in Lim’s corruption case relating to his purchase of the bungalow from Phang in 2015.

The chief minister is accused of using his position to obtain gratification for himself and his wife, Betty Chew, by buying the bungalow from Phang at RM2.8 million.

The prosecution said the property was valued at RM4.27 million at the time, and will present evidence to prove that Lim knew he was buying the house at below market price.

The offence, under Section 165 of the Penal Code, is punishable by a jail term of up to two years, a fine, or both, upon conviction.

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

During cross-examination, Phang’s lawyer, V. Sithambaram, asked if the housing loan was for RM2.125 million, to which Choong said, “Yes”.

She said the approved loan came with a base lending rate of 6.75 minus 2.2% over 30 months.

“The monthly repayment was RM11,872. This sum that was paid monthly included the principal and the interest?” said Sithambaram.

Choong said, “Yes”.

It was reported in 2016 that Phang had bought the bungalow for RM2.5 million in 2008.

Lim and his family moved into the bungalow the following year. He rented it at first, paying RM5,000 a month.

After court adjourned this afternoon, Lim’s lawyer, Gobind Singh Deo, said the defence will prove that the house had been sold to the chief minister at a fair value, or above the market value.

The chief minister is facing a separate charge under Section 23 of the Malaysian Anti-Corruption Commission Act for allegedly using his position to obtain gratification for himself and his wife by approving an application by Magnificent Emblem to convert agricultural land into a residential zone during a state planning committee meeting on July 18, 2014.

The trial before judge Hadhariah Syed Ismail resumes tomorrow at 9.30am.

The prosecution, led by deputy public prosecutor Masri Mohd Daud, will call 14 witnesses. – March 26, 2018.