Why is Putrajaya reviewing the Forest City project?

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Putrajaya is reviewing the Forest City project due to concerns that Malaysia is not benefiting from the development, particularly regarding financial transactions and tax revenues.

Putrajaya is currently undertaking a review of the Forest City project, a significant development situated in southern Johor. This review stems from the assessment that Malaysia is not deriving adequate benefits from the project. A key concern highlighted is a past arrangement where financial transactions related to property sales within Forest City were reportedly directed to the Chinese government rather than the Malaysian Treasury.
Concerns Over Financial Leakage and Tax Revenue Loss

A primary driver for the review is the revelation of a deal that facilitated financial transactions for property sales to be routed to the Chinese government, bypassing Malaysian authorities. This arrangement meant that taxes associated with these transactions were paid in China. The Economic Affairs Minister, Datuk Seri Azmin Ali, indicated that this structure allowed individuals to invest in China and, in return, receive a unit in Forest City, with all associated taxes settled in China, thereby offering no benefit to Malaysia.
Details of the Forest City Development

Forest City is a large-scale project undertaken by the developer Country Garden Holdings Co. The development is estimated to have a construction cost of approximately US$100 billion (RM410 billion) and was planned to accommodate a population of 700,000 residents. Its scope includes a variety of structures such as apartment blocks, landed houses, office towers, hotels, and shopping centres.
Previous Government Stance on Foreign Ownership

Previously, Prime Minister Tun Dr Mahathir Mohamad had stated that the government would not permit foreigners to purchase residential units within the Forest City project. However, it was later clarified by the Prime Minister's Office that the acquisition of property did not automatically confer residency status in Malaysia. This clarification was subsequently echoed by the Johor state government.

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Why is Putrajaya reviewing the Forest City project?

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