Friday, May 20, 2011

Right signals from Iskandar Investment

By Sharen Kaur
Published in NST on April 6 2011

ALTHOUGH the scandal at Iskandar Investment Bhd (IIB) may temporarily hurt its image, industry observers think it also sends the right signals to potential investors.

IIB's responsibility is to develop projects that can jump start Iskandar Malaysia, the country's special economic zone. It has reportedly attracted some RM70 billion of investments ranging from theme parks and universities to hotels, malls and offices.

It is also a long-term development slated for completion in 2025, and is designed to woo foreign investments and in turn help boost the Malaysian economy.

IIB on its part, seems unperturbed after its board filed a police report against former senior managers.

"We believe the market, in particular our business partners as well as our employees, will view this positively as this reflects our seriousness in ensuring proper governance is in place and irregularities and malpractices will not be tolerated," IIB chief executive officer Datuk Syed Mohamed Syed Ibrahim told Business Times.

While IIB is the catalytic developer for the Iskandar region, the main driver is its parent, Khazanah Nasional Bhd, assisted by other local property developers. This would include names like UEM Land Holdings Bhd, Mulpha International Bhd, Bandar Raya Developments Bhd, SP Setia Bhd, WCT Bhd and Bina Puri Holdings Bhd, which all have a stake in the development of Iskandar with several projects in hand.

Infrastructure works are ongoing while work has also started on major projects like Legoland Malaysia, the 1Medini residential project and several foreign campuses.

Zerin Properties founder and chief executive officer Previn Singhe said foreign investors may keep a close watch on recent developments but it is likely to be temporary.

"Foreign investors are cash rich and something like this won't bother them for long. At the end of the day, it is always money-driven," he said.

UOB-Kay Hian Malaysia head of research Vincent Khoo thinks foreign investors may look at the episode positively as it shows the country's improved transparency. He also does not think there will be any setbacks as Khazanah is fully committed to roll out its plan for the region.

"While I do not know or have details of the charges, I don't think it would impact IIB and its plans to develop the Iskandar region," Khoo said.

-ENDS-

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