The recent sale of the 49-acre Iskandar Studios Malaysia to a Singapore company for just RM32mil, compared to initial investment of up to RM748mil (90% loss), is extremely disappointing, especially to those in the film industry
Johor Bahru – Iskandar Malaysia Studios (IMS), a film and television production facility located here, has been sold to a Singapore company, GHY Culture & Media, for a small fraction of its original construction cost, it was announced last week. IMS was built in 2014 on the site of a former palm oil plantation as part of a government-backed initiative to develop a creative industries ecosystem within Johor’s Iskandar development corridor.
This is a project that had it’s groundbreaking in 2010 after former Prime Minister Najib Razak took office a year before. It was that same year that it partnered with world famous Pinewood studios to create Pinewood Malaysia which officially opened in June 2014.
Even before opening, the initiative of endorsement by a partnership with UK’s Pinewood Studios group brought credibility and a global network to the Malaysian facility. The launch of IMS was also accompanied by a 30% production rebate scheme, administered by FINAS, Malaysia’s national film regulatory and financing body, which was backed by Khazanah Nasional Berhad, the Malaysian government’s sovereign wealth fund.
The question on many people’s lips is this: Why would Khazanah even consider selling it at such an incredibly low price?
“Yup … it’s a ridiculous deal. I believe there was no discussion by the Cabinet. What about the Ministry of Finance? They should have looked for someone to do a management buyout and keep it in Malaysian hands,” said an award-winning film director who spoke on condition of anonymity.
“I am just wondering what auditor decided IMS has a 90 percent loss in value? Was IMS in financial and dire straits?Shouldn’t Khazanah invite FINAS to look for new investors?
“My point is if that was the selling price, I am sure a lot of Malaysian tycoons would come in and take over. I think FINAS was not kept in the loop. There is a thing called FIMI (Filming in Malaysia Incentive) which IMS is a big part off. Now that it is in Singaporean hands, how would that work?” he asked.
Based on the audited accounts of IMS for the financial year ended 31 December 2022, the net asset value of IMS is around RM32m, compared to a construction cost of between RM528m and RM748m when it opened in 2014.
However, a political analyst in his Facebook posting wrote that even if you knock the entire complex down, the 49-acre land was sold at a price of just RM15 per square feet.
“Ridiculous since the area had all the infrastructure already built including roads, water, internet connectivity and electricity,” remarked Lim Sian See.
Hit Movies Produced In Iskandar Malaysia Studios
“This project was meant to jumpstart our local film-making industry and got off to a strong start in its first three years until 2017 with many projects being filmed there including Netflix’s Marco Polo and the hit movie Crazy Rich Asians,” Lim added.
Before GE14, these were the productions filmed there:
- Marco Polo (Netflix) (2014-2016)
- Lost in the Pacific (2015)
- Projek Komedi Warna (2015) Astro Warna / Mustika HD / On the Go
- Elak-Elak (2015) Astro Warna
- Star Quest (2015) Astro Wah Lai Toi
- Asia’s Got Talent Season 1 (Auditions & Semi-finals Episode) (2015)
- Astro Classic Golden Melody (2015) Astro AEC
- Gempak Superstar (2016)
- Sembang Teh Tarik Kaw (2016)
- CS Go: Minor Championship Asia (2016)
- Hi-5 (2017)
- Crazy Rich Asians (2017)
- The Voice 决战好声 (Singapore/Malaysia edition) (2017)
- T2 Asia-Pacific Table Tennis League Season 1 (2017)
- Gegar Vaganza (Final) (2017)
- Asia’s Got Talent Season 2 (Auditions & Semi-finals Episode) (2017)
- Hello, Mrs. Money (2018)
After GE14, very few films were produced there:
- Asia’s Got Talent Season 3 (Auditions & Semi-finals Episode) (2019)
- Strike Back Season 7 (2019)
- Enemy Within (2019)
- Sembilan (2019)
- Disney’s Wizards of Warna Walk (2019)
It got worse after the Malaysian government ended its partnership with Pinewood studios in July 2019 which resulted in Pinewood Malaysia changing its name to Iskandar Malaysia Studios.
“All efforts should have been made to make this a success and preserve the partnership but we ended up losing to Singapore yet again at such a ridiculously cheap price,” added Lim.
Kidzania Was Sold Too
This is the second sale of Khazanah’s Malaysian assets at ridiculously low price after the sale of Kidzania Malaysia to yet another Singapore company in year 2020 at just RM3.8mil when the initial investment cost was RM80mil.
After Kidzania was reopened last year, it had been massively profitable and made RM6.46mil in just seven months of operations after it re-opened in May 2022.
Thus it is no surprise to see Khazanah performing so poorly after GE14 when what they have been doing is to keep selling assets at much, much below par value when in fact it should be developing these assets and making them into success stories.
Like how it was during Najib’s nine-year reign when Khazanah’s net assets grew from RM31b to RM116b as at end 2017. However, after GE14, it registered consecutive years of net assets dropping to just RM81b as at end 2022.
On another note, despite the setback, it is hoped that Malaysia can continue to attract investment in the creative industries sector, though officials in Sarawak have recently suggested that their state needs to build a new film production facility like IMS in Peninsular Malaysia.
In a recent statement, the Sarawak officials revealed that their state premier had visited the IMS and plans had been discussed with FINAS. It remains to be seen whether this new initiative can succeed where IMS failed. – mediahit