Land buyer claims bank cheated him

Paul Murugesu accuses a bank of manipulating the redemption sum and eventually auctioning off his property last month.

SUBANG JAYA: When Paul Murugesu bought a piece of land in Klang for RM11.5 million in December 2010, never did he expect that the seller’s bank would auction off the land two years later.

The 53-year-old Klang-based businessman felt even victimised as the bank allegedly did not grant him a chance to pay the bank loan and increased the redemption sum by RM8.6 million within 18 months.

He claimed that he had suffered more than RM3 million in losses, while risking to be evicted soon from his land.

Speaking at a press conference with Consumer Association of Subang and Shah Alam (Cassa) today, Murugesu claimed he entered into a valid Sales and Purchase Agreement (S&P) with a Malaysian registered company for the land that come with three units of warehouses and three jetty points in Port Klang.

The six-acre property was valued at RM11.5 million, forced sale (liquidation) value at RM8 million and fire insurance value at RM8 million.

The bank priced the property at RM8 million, due to previous attempts to auction off the land as the seller was unable to pay; while Murugesu proceeded to pay 10% of the RM11.5 million as down payment to the seller.

On Jan 5, 2011, a bank redemption letter was addressed to both the seller and Murugesu, indicating that the bank was aware of the dealing being initiated between all parties.

In the letter, it is said that the bank required a balance redemption sum of RM7.2 million to be paid by March 15, 2011.

Murugesu then spent RM2.5 million to renovate the property in hope to secure a certificate of fitness (CF) for his building, despite the seller having lied that the property had a CF when the agreement was signed.

When he thought things would finally get better, the bank allegedly sent another letter on May 2 this year informing him that the redemption sum was RM13 million, only to be increased to RM15.89 million on June 18.

Seven-day deadline for bank

Cassa president Jacob George slammed the bank for conspiring with hidden hands to manipulate the redemption sum and later auction off the land.

“How could they approve loan to a property without CF in the first place? How did they strike a deal with the seller?” he asked.

“The bank also fixed a ceiling price for the property at RM11.5 million, how could the bank now deviate from this?

“If the said sum is as stated, RM15.89 million, this represents a hike and interest rate of approximately 100%, which would be against all rules set by Bank Negara,” he said.

Meanwhile, Murugesu alleged that he was barred from taking part when the bank auctioned off his property on July 17. A company eventually succeeded in taking over the property on Aug 1.

“I really don’t know what to do now,” he said.

Describing the event as a “sham auction”, George urged the bank to rectify the matter within seven days, failing which he would bring it to the MACC, police and the Bank Negara.