Many welcomed the criminal and corruption charges against Mohd Isa last Friday
By RAHIMI YUNUS / Pic By TMR
Former Federal Land Development Authority (Felda) chairman Tan Sri Mohd Isa Abdul Samad is charged for criminal breach of trust (CBT) over the acquisition of the Merdeka Palace Hotel and Suites in Kuching, Sarawak.
Prosecutors said the 69-year-old former mentri besar (MB) of Negri Sembilan approved the RM160 million purchase of the hotel by Felda Investment Corp Sdn Bhd (FIC) in 2014 without the consent of Felda’s board. FIC had bought the hotel at a higher price than the market value.
According to the charge sheet, Mohd Isa as the former director of FIC had violated the board’s mandate dated June 25, 2013.
The mandate prohibits FIC’s directors from solely deciding on investments above RM100 million.
Mohd Isa is accused of committing the crime on April 29, 2014, at Level 50, Menara Felda in Kuala Lumpur (KL).
He is also indicted with nine counts of bribery totalling RM3.09 million on the hotel purchase, or about 1.9% of the total payment.
Mohd Isa, who is also the former chairman of FGV Holdings Bhd, has been accused of receiving bribes in nine tranches from Gegasan Abadi Properties Sdn Bhd director Ikhwan Zaidel through his former aide Muhammad Zahid Md Arip.
The almost RM3.1 million was the compensation for approving the hotel purchase. The nine tranches of payments to Mohd Isa were made between July 21, 2014, and Dec 11, 2015, according to court charges.
Mohd Isa pleaded not guilty to all the 10 charges. If found guilty, Mohd Isa faces a maximum 20-year jail sentence, whipping and fine for the CBT indictment.
Meanwhile, the bribery charges carry a maximum 20-year jail term and a fine of no less than five times the amount of gratification or RM10,000, whichever is higher, under Section 24(1) of the Malaysian Anti-Corruption Commission (MACC) Act 2009.
Mohd Isa was released with an RM800,000 bail with one surety. His passport is impounded and the case management has been set on Jan 25, 2019.
Mohd Isa was appointed Felda chairman on Jan 1, 2011, for six years before he was replaced by Tan Sri Shahrir Abdul Samad who took over the position on Jan 6, 2017.
The former MB remained as chairman of FGV up to June 2017 when he voluntarily relinquished all his posts at the listed firm.
Mohd Isa was popular among Felda settlers. His friendly nature was just like another orang kampung who spoke the same language and had a know-your-suffering attitude, which eased his entry into the state-owned entity.
His 22-year experience as the MB of Negri Sembilan gave him an advantage to charm the over 100,000 Felda families.
He enjoyed an almost king-like life in the Felda kingdom. Felda was critical to Barisan Nasional (BN) and seen as a safe deposit to the alliance. A likeable Felda chairman was critical.
But Pakatan Harapan’s historic 14th General Election victory has expedited the legal process, despite early investigations against him being instituted during BN’s administration.
No charges were brought against Mohd Isa then. The CBT and corruption charges last Friday were the first against Mohd Isa.
However, the hotel in Kuching is not the only contentious property that is being investigated by the authorities.
The MACC has also probed FIC’s purchase of the Grand Plaza Kensington Hotel in London.
The purchase of the four-star hotel was made some time between 2013 and 2015. Analysts had said the price was bloated, but no charge has been brought in relation to the London deal.
The controversial purchase drew criticism from various quarters as early as 2013.
In 2015, the Opposition demanded the MACC to clarify the status of investigations on claims that Felda’s management had paid RM538 million for the purchase of the Grand Plaza Serviced Apartments in Bayswater, London, and RM330 million for the purchase of the Grand Plaza Kensington Hotel. Mohd Isa launched the hotel in December 2014.
On June 21, 2017, days after his resignation as FGV chairman, Mohd Isa and wife Puan Sri Bibi Sharliza Mohd Khalid were questioned by the MACC over the alleged improprieties in the firm.
Mohd Isa was remanded on Aug 16, 2017, as the MACC intensified its investigation into the London hotel purchase. He was released five days later.
On Jan 4 this year, Mohd Isa was quizzed by the police over the transfer of Felda’s land in Jalan Semarak, KL.
A Start to Cleansing Process
Many welcomed the criminal and corruption charges against Mohd Isa last Friday. It had reaffirmed the many allegations of misses and wrongs at the state-owned land development authority in the last few years.
The majority of Felda and FGV staff blame the top management over the debacle at the government-linked entities. Felda is saddled
with a total borrowings of RM8 billion and facing a critical cash crunch.
FGV’s share price nosedived to 64 sen last Friday, erasing more than RM10 billion in market capitalisation since it became the world’s second-largest initial public offering after Facebook Inc in 2012.
FGV’s current share price is a far cry compared to its initial listing days of a high of RM5.46.
The Employees Provident Fund (EPF), one of the major shareholders in FGV, has exited the planter.
Thousands of Felda settlers are saddled in debt over their loans to purchase FGV stocks. The previous government had taken over the debt of the settlers.
A source in FGV said one of the reasons of the EPF’s exit was due to the governance issue at the planter — especially the appointment of the same person to chair so many companies and subsidiaries within the group.
As for the Asia Plantations Ltd (APL) scandal, FGV’s new management has filed a civil suit against 14 former board members and management staff including Mohd Isa, and former group president and CEO Datuk Mohd Emir Mavani Abdullah.
As at the third quarter ended Sept 30, 2018, FGV registered a net loss of RM849 million against a net profit of RM41.5 million a year ago — the biggest quarterly loss ever, due to the impairment charge on an overpaid asset acquisition linked to APL.
The problems at Felda and FGV may not be as intricate, dark and deep as the web of deceits and transfers of 1Malaysia Development Bhd funds, but these are two state-owned institutions which are responsible for the livelihood of over 100,000 families of settlers and a key national export.
Many will have to pay a heavy price before a total reset can happen.