Boustead: Talks with Deepak's firm not recent

Shareholders of Astacanggih Sdn Bhd, which carpet trader Deepak Jaikishan had an interest in, had made an offer to sell their stake to Boustead Holdings Bhd in June last year.

This was disclosed in Boustead Holdings' filing to Bursa Malaysia yesterday.

"The acquisition of 80 percent in Astacanggih forms part of this corporate exercise to acquire an 80 percent interest in the 200-acre development land in Bukit Raja at a total price of RM160 million or RM18.37 per square feet," read the filing.

The filing by Boustead Holdings is likely an attempt to put the brakes on claims that the company, partly owned by the Defence Ministry, had acquired Astacanggih to silence Deepak (left).

The carpet trader had been on the warpath against Prime Minister Najib Abdul Razak and his wife Rosmah Mansor since the Umno general assembly in late November.

Among others, Deepak had claimed that Najib had not honoured his part of a deal struck when he was defence minister, leading him into a court dispute over the same plot of land with Awan Megah Sdn Bhd.

Late last month, Deepak abruptly withdrew from the suit against the company, generating speculation that he had been bought over with the acquisition.

The filing by Boustead Holdings had also stated that negotiations with Awan Megah had been ongoing since April 11, 2005.

"However, the Boustead Group was only able to conclude the final agreements in the third week of December, 2012 after prolonged negotiations with the respective parties," said the company.

It added that they expect to benefit from economies of scale by combining the 200-acre land which is adjacent to 700 acres held under Jendela Hikmat Sdn Bhd, a company in which Boustead Group and Lembaga Tabung Angkatan Tentera (LTAT) jointly hold 60 percent equity.

The company expects the acquisition of the 200 acres of land to generate a return on development cost of 25 percent from the RM160 million investment.

No army vet funds used in deal

Meanwhile, LTAT also defended the recent acquisitions.

In a statement yesterday, its chairperson Admiral (Retired) Mohd Anwar Mohd Nor (right) maintained that Boustead's corporate exercise was based on commercial reasons and not on other considerations.

He also said that no army funds from LTAT were involved in the exercise although it holds 60 percent equity interest in Boustead.

“Boustead used its profits from its property development projects to finance the purchase of an 80 percent stake in Astacanggih.

“Astacanggih currently does not have any bank loan, and will make a loan to finance the acquisition and land development in Bukit Raja,” he said.

Mohd Anwar explained that the acquisition was aimed at expanding Boustead's land bank and generate long-term profits for the company.

He said LTAT, the government agency that holds the pension fund of military personnel, will closely monitor all its investments including in Boustead to ensure the best returns for LTAT's contributors.

“LTAT has full confidence that the land development project will be successful, like other Boustead land development projects, besides providing affordable houses for purchase by ATM personnel," he added.