And here’s the first The Malaysianist podcast.
A few readers have asked for an audio version of some of the stories, so here we are.
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Earlier this month, the Financial Times dropped a story that got attention here at home: the former CEO of Battersea Power Station, Donagh O’Sullivan, filed a whistleblower claim alleging that the project’s books were cooked.
Undeveloped land allegedly valued hundreds of millions of pounds above independent estimates.
Expenses reportedly capitalised to inflate the balance sheet. Battersea has denied the allegations, but the claims — reportedly backed by forensic accountants — have reopened a decade-old wound that many in corporate Malaysia would rather leave alone.
To make sense of it all, I had a chat with P Gunasegaram, founding editor of Kinibiz, and now a columnist for Malaysiakini as well as independent researcher and analyst.
Gunasegaram and his team were among the first journalists in Malaysia to raise red flags about the Battersea deal, where he and his team published a provocative piece back in 2015 headlined, Is Liew Conflicted?, at a time when most of Corporate Malaysia either didn’t notice or didn’t want to.
Today’s podcast makes sense of the bleed around Battersea and why — after more than a decade on — this project deserves greater public scrutiny.
Shownotes:
Conflict and governance issues at Battersea
The Battersea project was marked by early conflicts of interest and governance challenges tied to key figures and shareholder dynamics.
Liew Kee Sin’s conflict and control role shaped the project’s early controversy (03:37)
Liew was simultaneously involved with SP Setia and EcoWorld, negotiating land near Battersea while denying his EcoWorld role initially.
Despite conflict disclosures, Liew remained influential, controlling SP Setia operations and pushing Battersea forward until his resignation as chairman.
The controlling shareholders — EPF, PNB, and Sime Darby — had complicated interlocked stakes, limiting independent oversight.
Gunasegaram criticised shareholders for not acting decisively on Liew’s conflict, which contributed to ongoing governance risks.
Political influence enabled continuation despite conflicts (09:58)
The project enjoyed high-profile backing from leaders like Najib Razak and Boris Johnson, reinforcing Liew’s position despite issues.
Gunasegaram noted that executive influence, especially from the prime minister, often overrides independent decision-making in GLICs.
Media coverage was reportedly influenced by Liew’s advertising clout, potentially muting critical reporting.
The lack of pushback from institutional shareholders reflected broader systemic challenges in corporate Malaysia governance.
Financial risks and losses from Battersea investments
Malaysian stakeholders face significant financial losses due to risky profit guarantees and opaque transactions linked to Battersea.
Quarterly losses from rental guarantees hit hundreds of millions ringgit (10:42)
Malaysian owners — SP Setia and Sime Darby — face losses of about RM250 million quarterly, totalling nearly RM 1 billion annually due to a five-year rental guarantee.
This guarantee effectively shifts market risk to Malaysian firms, making the buyer’s investment risk-free and raising questions about the deal’s prudence.
The loss figures spotlight the financial strain on these public-listed companies without clear explanations to investors.
Transparency on rental income and guarantee details remains lacking, fueling uncertainty about future cash flows.
Opaque sale of Battersea commercial development raises accountability concerns (14:23)
In 2018, a company owned 65% by EPF and 35% by PNB bought Battersea’s commercial property for £1.58 billion (~RM 8.8 billion).
Despite this massive cash inflow, subsequent reports indicate ongoing cash injections from Sime Darby raises questions.
The profit guarantee applies to this commercial development, creating a circular relationship where Malaysian GLICs guarantee profits to companies they partly own.
Gunasegaram called for a joint public statement from EPF, PNB, Sime Darby, and SP Setia to clarify financial impacts and reduce public uncertainty.
Complex interconnections and ownership structures
The project’s ownership web involves multiple GLICs and GLCs, creating unusual cross-holdings that complicate transparency and risk exposure.
Incestuous relationships among GLICs and GLCs amplify risk (16:18)
EPF and PNB hold stakes in Battersea and the companies providing profit guarantees, blurring lines between investors and beneficiaries.
These cross-holdings, especially at the scale involving over RM 1 trillion in EPF funds and RM 300 billion in PNB investments, are unprecedented and risky.
Such structures may prioritise political or strategic goals over financial prudence, exposing public funds to high risk in foreign projects.
Gunasegaram highlighted the missed opportunity to deploy funds within Malaysia instead of risky overseas ventures with poor track records.
Market cyclicality argument obscures financial realities (17:55)
The common defence that London property losses are temporary ignores the ongoing cash burn and unclear asset appreciation timelines.
With no public data on how much money is lost or invested, stakeholders cannot assess if the cyclical downturn justifies sustained losses.
GLICs are expected to provide accountability and transparency to avoid prolonged ambiguity and potential financial damage to Malaysian investors.
Recent allegations and financial reporting concerns
New whistleblower claims and forensic reviews raise serious questions about Battersea’s accounting and asset valuations.
Former CEO alleged financial misreporting and was dismissed (19:26)
Ex-CEO O’ Sullivan, with a 20-year property sector record, claimed Battersea overvalued undeveloped land by hundreds of millions of pounds and capitalized expenses improperly.
Forensic accountants reportedly verified these concerns, though Battersea denies wrongdoing, stating their accounting is proper and fair.
Gunasegaram noted UK accounting rules require capital expenditures to hit profit and loss immediately, suggesting possible policy breaches or judgment calls.
The controversy underlines the need for clearer financial disclosures and explanations of accounting judgments.
Investors face uncertainty amid lack of transparent reporting (21:09)
The London property market’s mechanisms allow buyers to exit investments if prices drop more than 10%, risking deposit losses but limiting further exposure.
Many Malaysian buyers are investors hoping to flip properties, thus vulnerable to price drops and incomplete transactions.
SP Setia and Sime Darby’s equity accounting means any inflated Battersea valuations would directly affect their Malaysia financial reports.
Gunasegaram urged Malaysian investors and GLICs like EPF and PNB to demand detailed clarifications and accountability.
Ongoing financial support and long-term outlook
Despite large cash inflows from property sales, Malaysian companies continue pumping money into Battersea, raising questions about project viability.
Sime Darby injected RM147 million in Q4 2025 despite earlier sales proceeds (24:10)
Gunasegaram questioned why cash advances continue despite the RM 8.8 billion received from the Battersea commercial sale to EPF-PNB owned company.
This suggests either continued capital needs or inefficient fund use, exacerbating financial exposure and investor concerns.
The ongoing cash injections contradict assumptions that large sales would stabilise Battersea’s finances.
Transparency about fund usage and project status remains critical to restore trust.
Tribunal on former CEO claims expected to last until 2029 (25:50)
The legal process will take several years, prolonging uncertainty over the accounting and management issues raised.
Gunasegaram stressed the urgent need for a comprehensive public statement from key shareholders — SP Seta, Sime Darby, EPF, and PNB — to clarify the project’s status.
This transparency would help investors understand risks and losses instead of remaining in the dark.
The drawn-out timeline highlights governance and accountability gaps in managing large government-linked investments abroad.
Other notes
P Gunasegaram’s Malaysiakini columns can be accessed here.
Kinibiz’s coverage of Liew Kee Sin and Battersea can be found online as well as in the PDF-ed print magazines.
