The judge in the 1MDB trial of former Malaysian prime minister Najib Razak determined in court yesterday that RM13.1 Billion assigned to the development of Kuala Lumpur’s newest luxury mall went to the former prime minister’s personal bank account

Grand entrance of The Exchange TRX, in front of which is the massive Raintree Plaza

The Exchange TRX, Kuala Lumpur’s newest and swankiest mall, part of the satellite development next to the Bukit Bintang shopping district that is part of the Tun Razak Exchange development, is in the spotlight again. This time, it isn’t about the many flagship stores in the shopping complex or the regional stars attending a grand opening of one of its many luxury stores. It is now about funds from bond issuance earmarked for its development that the project allegedly did not receive. The money, instead, went to former Malaysian prime minister, 71-year-old Najib Razak. According to the Bernama News Agency, the judge presiding over the case revealed that TRX—as the massive complex is usually referred to—did not receive some US$3 billion (or about S$3.97 billion) that was amassed for its development. Instead the money, as it was reported, “ultimately” went to Mr Razak’s bank account. How the finances meandered away from its intended end point is not yet totally clear.

TRX has been described as Mr Razak’s “pet project”. Local media has said that even if the ex-PM goes down with the allegations levelled against him, his “legacy” will remain and stand tall. The main tower of TRX is The Exchange 106, a super skyscraper that stands at 345.5 metres tall. It ranks the second highest building in the capital, after Merdeka 118, and is taller than the Petronas Twin Towers. The Exchange 106 has been touted as the “centrepiece” of a new eastern edge of KL’s CBD, the Tun Razak Exchange, named after Najib Razak’s father, the second prime minister of the country. Even before the edifice was completed, locals started derisively calling it “Najib’s Tower”, which attested to many Malaysians’ anger towards the venture and their desire to dissociate Mr Razak with it, especially after the details of the 1MDB scandal were revealed, that, according to authorities, involved his wife Rosmah Mansor, allegedly a massive spender of money not hers.

The Exchange 106 (on the left) looms over the expansive property

Welcoming visitors in November last year, the mall component of TRX is the city’s third luxury development—within a roughly 2.3-kilometre diameter—after the mall at the PETRONAS Twin Towers Suria KLCC (colloquially known as KLCC) opened in 1999 and Pavilion KL (a misnomer, considering the mall offers about 159,000 sqm of leasable space, spread over seven floors) in 2007. It is not known if Malaysians need three shopping destinations of somewhat similar positioning and that are all homes to Balenciaga, Dior, Louis Vuitton, and Prada. TRX, a late entrant to the luxury mall game, offers little by way of the much-touted experience that today’s retail behemoths are expected to offer. It is no doubt a huge space, but nothing within it is not already available at the other two similarly huge malls. Retail presence for brands in KL’s newest is, of course, necessary. Even our own Club 21 is in TRX, but they occupy a sub-leased space in Seibu department store, possibly unwilling to invest in a freestanding unit, following two nearby operations, one in Pavilion KL and another at Shoppes at Four Seasons Place. However, it is not certain that shopping complexes conceived to impress by size alone offer KL real retail distinction.

Back in January, court proceedings revealed that the money intended for TRX had been raised for the project by Goldman Sachs through a bond issue. The arrangement was made after 1MDB entered into a joint venture with Abu Dhabi-headquatered Aabar Investment PJS in 2012 to realise the TRX project. The Australian real estate company Landlease co-developed and manage as the mall. Malaysian Anti-Corruption Commission told the court back then that “although the funds were meant for TRX, Najib allowed the funds to be invested in an investment fund under BSI Bank”. In 2017, the ministry of finance took over the TRX project as part of 1MDB’s rationalisation plan after the state fund incurred debts in excess of RM50 billion. Mr Razak was told by the court earlier to enter his defence on four charges of obtaining gratification amounting to multi-billions in 1MDB funds, as well as 21 money laundering charges pertaining to the said funds. For many Malaysians, the figure is incomprehensible, just as the appeal of yet another unvaried luxury mall is.

File photo: Hafiz Hazaini for SOTD