White paper on Felda’s RM8b loan repayments

The report to be tabled in the next Dewan Rakyat’s sitting to expose the actual situation faced by Felda

By P PREM KUMAR & DASHVEENJIT KAUR / Pic By TMR

The government will table a “white paper” on the Federal Land Development Authority (Felda), which has been at the centre of controversial deals, allegations of mismanagement and mounting debts.

The report, which will be tabled at the next Dewan Rakyat sitting, will expose the land development entity’s current financial standing and related issues that had plagued the state-owned body.

Felda is also saddled with RM8 billion in loans, which the government will restructure with its creditors.

Economic Affairs Minister Datuk Seri Mohamed Azmin Ali said Felda is currently facing very critical cashflow problems due to political interference during the previous government’s administration.

“The government has decided to present the white paper in Parliament in the upcoming session to expose the real situation faced by Felda, and also the strategic recovery mechanism,” he said in Dewan Rakyat yesterday.

Azmin was responding to MP Mamun Sulaiman (Pakatan Harapan-Kalabakan) who asked the ministry to state the latest restructuring process of Felda, which purportedly underwent financial and governance crisis.

“The next step being taken to strengthen the cashflow position is through sale of non-strategic assets, such as offshore and domestic real estates.

“The immediate focus of Felda’s board of directors and management is to reverse Felda’s cashflow position through discussions with creditors by

restructuring its loans, which has reached a total of RM8.03 billion,” he added.

White papers are policy documents produced by the government that set out their proposals for future legislation, which could provide a basis for further consultation and discussion with interested, or affected, groups before a bill is formally presented to Parliament.

Azmin said the government is confident the new management of Felda will adhere to the principle of accountability and high governance to ensure its recovery process and sustainable development.

The minister also said Felda’s board and its new management will implement statutory obligations for the settlers.

“The new government today assures that settlers’ subsidised loans and revenue advances will be paid on schedule.

“The revitalising of Felda is crucial for the wellbeing of the settlers and in line with the goal of setting it up under the Land Development Act 1956,” he added.

Azmin also said Felda had transferred about 400,000ha of oil palm land to FGV Holdings Sdn Bhd for exploration and listing purpose in 2012.

The matter will be included in the white paper and the government will re-look into it.

“FGV Holdings Bhd management’s views will also be taken into our consideration,” he said, after Mamun claimed that only 9,000ha of oil palm land, out of the 400,000ha, was given to Felda settlers.

The minister was also asked whether the Tawau Oil Product Factory is still operating. The factory is a subsidiary of Felda Vegetable Oil Products Sdn Bhd.

Azmin said both Tawau Oil and Felda Vegetable were not under Felda’s management, but FGV is in the process of rationalising its operations to enhance the company’s value and performance.

“FGV does not intend to close the Tawau Oil refinery operations,” he added.