Censured in A-G Report, Sanusi says St Regis Langkawi's land still belongs to Lada

KUALA LUMPUR, Nov 23 — Datuk Seri Muhammad Sanusi Md Nor has reportedly explained that the Langkawi Development Authority (Lada) still owns the land where the luxury hotel St. Regis Langkawi was developed.

After the Auditor-General's Report yesterday highlighted irregularities over the land lease, the Lada chairman said the ownership over the parcel has yet to be resolved because the initial agreements were not fulfilled.

“There was an issue of misconduct during its development process. [The developer] did not comply with the initial agreement, Lada did not allow our land to be used as collateral.

“So, we did not sign. Thus, the land does not belong to the St. Regis, it still belongs to Lada," he was quoted saying by New Straits Times.

“St Regis does not lease the land from Lada, so how do you collect land leasing from them?" he reportedly asked.

Sanusi, who is also Kedah menteri besar, reportedly said that the issue should instead be referred to the Ministry of Finance, since Lada is an agency under its purview.

Yesterday, the A-G's report for 2022 revealed irregularities regarding the land on which St. Regis Langkawi was built which involved two land lease plots: Plot 1 (Subplot A and B) and Plot 2 (Subplot Ci and Cii) worth RM69.67 million with a total area of 47.25 acres located in Mukim Kuah, Langkawi.

Lada had leased land to the company for hotel development based on the Shareholders Agreement (SHA) that was signed on April 11, 2014.

However, the audit found that no lease agreement was signed for Plot 1 and the land lease rate for Plot 2 has not been finalised as of December 31, 2022.

The A-G said that it found out on December 9, 2019, that the Lada board of directors decided in a meeting that same year that there was no need for it to sign a land lease agreement due to the weakness of the company's financial performance.

This resulted in enforcement actions not being implemented because the lease agreement contract was not signed while the collection of land lease revenue could not be made even though there were conditions that had been agreed in the SHA.

The Parliamentary Public Accounts Committee (PAC) has since summoned the Ministry of Finance to record its explanation of Lada’s real estate management on November 30.