“Corporate malfeasance” that led to Felda suffering massive losses.
- From average cash balance of RM2.5 billion balance just 10 years ago to RM35 million at GE14
- From RM1.2 billion debts in 2007 to RM14.4 billion by 2017
- Najib implicated in “shady deals”
- Conflict of interest worsened when Isa Samad held executive power as Felda chairman.
The Dewan Rakyat was told that some RM2.7bil of Federal Land Development Authority (Felda) money meant to upgrade its plantations was used to buy political support before the last general election in May 2018.
Economic Affairs Minister Datuk Seri Azmin Ali, in tabling the White Paper on Felda in Parliament on Wednesday (April 10), said the money came from the listing of Felda Global Ventures Holdings (FGV), the commercial arm of the land development agency, which generated RM10.5 billion in cash, and where Felda earned RM6 billion.
“RM2.7 billion was used to buy support in the 14th general election,” Azmin said.
He said Felda’s earnings were supposed to have been utilised to develop capacity for its future, to develop its plantations as well as for its modernisation programme involving technology, and research and development.
“Unfortunately, RM1.4 billion from the revenue earned by Felda through the listing was spent on dubious investments involving shady transactions,” he added.
Azmin said while Felda had billions of ringgit in its coffers in the past, its cash flow was now at a critical level.
He said the agency’s cash balance had plunged from an average of RM2.5 billion between 2007 and 2011 to only RM400 million in 2017.
As of May 9 last year, Azmin said, Felda only had RM35 million left.
“Such cash flow constraints have rendered Felda unable to cover its operating expenses, replantation costs, aid as well as loans for settlers,” he said.
Azmin also alleged that former prime minister Datuk Seri Najib Razak was implicated in “shady deals”.
“(Najib), who was known as MO1 and who was the finance minister at the time, was involved in the investment process.
“These actions were not only irresponsible but criminal in nature,” he claimed, drawing murmurs from lawmakers.
Azmin cited the purchase of Indonesian company Eagle High TBK from PT Rajawali Capital at a 96% higher market rate as an example of the abuse of Felda funds.
He added that as of March this year, the RM2.3bil investment is now worth only RM500mil.
On Tuesday (April 9), Felda director-general Datuk Dr Othman Omar lodged a police report claiming that Najib had pushed it into investing US$505mil (RM2.07bil) in Eagle High.
In the report, he said the amount paid to acquire a 37% stake in the Indonesian company was 344% more than its actual value of US$114mil (RM466.9mil).
Eagle High is part of the Rajawali Group owned by Peter Sondakh, who Othman claimed was close to Najib.
Meanwhile, Azmin added that Felda’s debts had drastically risen by 1,100% from RM1.2bil in 2007 to RM14.4bil by 2017.
He also said the forensic audit found conflict of interest, most apparently when Isa Samad was given the post of chairman in Felda, Felda Investment Corporation Sdn Bhd (FIC), FGV Holdings Berhad, and 39 subsidiaries under Felda and FGV.
“For instance, the acquisition of Park City Grand Plaza Kensington in London was done by Isa, without the approval of the Felda board, above market price and in violation of Felda’s investment policy.
“Isa bought the property at RM331 million while the market price for the property at the time was only RM128 million,” he said.
Park City Grand Plaza Kensington was among eight Felda investments that came under scrutiny during a forensic audit for the white paper.