KUALA LUMPUR: Malaysian Prime Minister Mahathir Mohamad on Monday (Aug 27) declared that foreigners will not be granted visas to live in the giant Forest City project in Johor, a major threat to the marketing strategy for the development.
It is not his first broadside against the plan by Chinese developer Country Garden Holdings Co to create a new city that was envisaged to eventually house 700,000 people on reclaimed land near Singapore, but it could be his most damaging. The company has been targeting foreigners more than Malaysians for sales of the apartments.
A top official at the project told Reuters last week that in the weeks immediately after 93-year-old Mahathir came back into power, through a shock election victory in May, demand for the apartments had weakened, and that the uncertainty remained a concern.
His latest comments are likely to exacerbate those concerns.
"One thing is certain, that city that is going to be built cannot be sold to foreigners," Mahathir said at a news conference on Monday in Kuala Lumpur in response to a question from Reuters. "We are not going to give visas for people to come and live here."
Mahathir, who was Malaysia's leader from 1981 to 2003, said the government's objection was "because it was built for foreigners, not built for Malaysians. Most Malaysians are unable to buy those flats".
Country Garden issued a "statement of clarification" following Mahathir's comments, saying that Forest City has "complied with all laws and regulations with the necessary approvals to sell to foreign purchasers".
The company added that it was "in touch" with Mahathir's office for clarifications, saying it believed his comments were "taken out of context in certain media reports" as they "do not correspond with the content" of his meeting with Country Garden chairman Yeung Kwok Keung.
Country Garden Chinese buyers now make up about two-thirds of the owners of the Forest City apartments that have been sold so far, with 20 per cent from Malaysia and the rest from 22 other countries including Indonesia, Vietnam and South Korea.