Trurich lodges police report over alleged 
misled Indonesia acquisitions


Trurich Resources Sdn Bhd, a joint venture (JV) between Lembaga Tabung Haji (TH) and FGV Holdings Bhd, has lodged a police report against five individuals including former TH CEO Tan Sri Ismee Ismail for allegedly misleading the company in the acquisition of oil palm plantations in Indonesia.

In a statement issued last Friday, Trurich said it had filed the police report against Ismee; former TH Plantations Bhd CEOs Datuk Seri Zainal Azwar Zainal Aminuddin and Datuk Rashidi Omar; and two Indonesians, namely Drs H Rajasa Abdurachman and Badai Sakti Daniel.

The company also said that TH had approved the acquisition of green and brown field oil palm plantations in Kalimantan Utara (Kaltara) and Kalimantan Tengah (Kalteng) in 2008, at the time when Trurich was a wholly owned subsidiary of TH.

“Trurich was used as a vehicle to acquire shares in the companies that owned the plantations, collectively referred to as Kaltara PTs and Kalteng PTs,” it said in the statement.

Trurich added that various misrepresentations were made and material information were withheld during the board’s deliberation and decision relating to the Kaltara and Kalteng transactions, based on documents available including minutes of TH’s and Trurich’s board meetings.

“The misrepresentations and withholding of material information were to the detriment of Trurich, which was misled into overpaying for both the Kaltara and Kalteng land plots, as well as buying back shares it had already paid for,” it noted.

The company explained that it had paid about US$12.2 million (RM51.1 million) for Kaltara PTs, which cover 30,000ha of land, and US$45.8 million for Kalteng PTs which hold about 12,833ha of oil palm plantation and a 60-metric-tonne palm oil mill.

It also highlighted that a ground assessment’s conclusion of the Kaltara lands led by Zainal Azwar’s team in March 2008 was incorrect. Zainal Azwar concluded that only 20% of the soil in the Kaltara lands were of “moderately deep peat”, it said.

In fact, Trurich said a new finding by CH Williams Talhar and Wong Sdn Bhd dated July 1, 2008, concluded that 77.86% of the soil were of deep peat, confirmed by another report by PT AKSS.

Trurich claimed that Ismee had only attached information in a memorandum to the Prime Minister’s Department dated Aug 22, 2008, among others, which represented that only 20% of the soil was deep peat.

FGV acquired a 50% stake in Trurich from TH through subsidiary Felda Global Ventures Kalimantan Sdn Bhd in November 2009.

The Malaysian Reserve previously reported that TH planned to take over FGV’s entire stake in the JV plantation company, according to an industry source.

Trurich was said to be facing operational issues, subsequently hurting its fresh fruit bunch production.

According to FGV’s 2017 annual report, Trurich’s liabilities at the end of the financial year 2017 stood at RM214.2 million. The company posted a net loss of RM97.5 million.

The carrying value for FGV’s 50% stake in Trurich was RM137.1 million at end-2017.