Tuesday 23 June 2015

Criminal conduct links corrupt Malaysian officials from MARA in multimillion-dollar property transactions in Australia.

Corrupt overseas buyers ramp up property price, burn locals

The Malaysians: Mohammad Lan Bin Allani says he cannot recall the Dudley House dealings.

The Malaysians: Erwan Azizi, the son of a Malaysian “Dato”, helped facilitate the property deal using his network of contacts.  


Nick McKenzie, Richard Baker, John Garnaut


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A simple guide to the sale of Dudley House in Caulfield which has been linked with corrupt Malaysian officials, who allegedly intentionally paid 20 per cent over the asking price.
The first hard evidence has emerged of Australian property prices being inflated as real estate is used as a safe haven or money laundering hub by corrupt foreign nationals.
The alleged criminal conduct is linked to multimillion-dollar property transactions which drove a group of small Australian tradesmen to the wall and which implicates top Malaysian officials and businessmen.

<b>Sold for $22.5m</b> Student accommodation, Dudley International House in Caulfield East.  
Sold for $22.5m Student accommodation, Dudley International House in Caulfield East.
Fairfax Media can reveal that a group of super-rich Malaysian officials, spending their own government's investment funds, have bid up the price of a Melbourne apartment block from $17.8 million to $22.5 million. The extra $4.75 million was then laundered out of Australia and allegedly paid as bribes in Malaysia.

Despite the huge amounts involved, about 150 Australian creditors, including Melbourne tradesman John Bond and several other builders, have been left out of pocket or are facing bankruptcy after a company linked to the deal collapsed.

"This deal has ripped off Australians and involve serious corruption but no one has been held to account," Mr Bond told Fairfax Media.

Tradesman John Bond who has recently gone into liquidation due to non-payment for services by a developer.
Tradesman John Bond who has recently gone into liquidation due to non-payment for services by a developer. 
About $80 million worth of Australian property, including office or apartment blocks in Swanston, Queen and Exhibition streets in Melbourne's CBD, are implicated in dealings by the same group of high-ranking Malaysians.

While the Abbott government has been publicly warning about foreign owners breaching Australian laws and inflating property values in Sydney and Melbourne, Fairfax Media's investigation provides the first hard evidence of criminal conduct.

Leaked emails reveal how some of those behind one of the property deals sought to conceal their involvement from the Australian Foreign Investment Review Board by falsely understating the size of their investment.

The revelation raises serious questions for the government about the relative ease with which overseas nationals are moving dirty money into Australia without detection, as well as the involvement of foreign officials.

Fairfax Media uncovered the alleged criminal scheme by tracing the purchase of tens of millions of dollars of Australian properties via tax haven shelf companies in the British Virgin Islands and Singapore.

The Dudley House apartment block in the Melbourne suburb of Caulfield is at the centre of the transactions. It was bought in 2013 by a Malaysian government agency called MARA. Those allegedly involved include top Malaysian government officials and Chinese-Malay businessmen.

According to property records and confidential emails, the Malaysian figures demanded a $4.75 million bribe in return for guaranteeing that the funds would flow from the Malaysian government to buy the building.

An Australian property developer involved, Peter Mills, last year conceded before a civil court that the $4.75 million was "paid to grease palms to get the deal done".
Another developer, Chris Dimitriou, described the artificial inflation of the property price to $22.5 million as "overcharging".

The bribe was paid via sham invoices issued to the Australian developers from Malaysian companies. The invoices demanded payment for non-existent services, including "professional advice" and "consultancy and advisory fees".

The Malaysian firms that received the alleged kickbacks are closely linked to a senior figure at the Malaysian government investment agency MARA. Another figure involved is a senior Malaysian official and former politician with close links to a Malaysian cabinet minister.
In administration proceedings in the Victorian Supreme Court last year, Australian developer Chris Dimitriou said his Malaysian business partners were of "high rank" and "likely to be well connected".

When quizzed directly about the $4.75 million "kickback", Mr Dimitriou said he believed it "went to Malaysian parties" but said he "asked no specific questions" about the funds as he "was more concerned about getting the sale over the line".

Another figure involved in the deal, dual Malaysian and Australian citizen Dennis Teen, told the court that: "We are not saints … we just want a deal done."

Treasurer Joe Hockey has recently highlighted federal government moves, including investigations by the Tax Office and Foreign Investment Review Board, to crack down on foreign property owners breaching Australian laws and helping to ramp up property prices.
The Chinese government has also launched an aggressive campaign against allegedly corrupt Communist Party officials it claims have invested corrupt funds into Australian property.

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