By ALIFAH ZAINUDDIN & DASHVEENJIT KAUR / Pic By TMR
THE Federal Land Development Authority (Felda) will initiate a legal action on transactions linked to its hotel purchases in London and Sarawak in the near term.
The transactions, which were listed in the Felda White Paper, included a forensic audit by Ernst & Young Advisory Services Sdn Bhd.
The audit had identified eight dubious transactions linked to Felda and its investment arm, Felda Investment Corp Sdn Bhd (FIC).
To date, Felda has only lodged two police reports involving dealings on PT Eagle High Plantations Tbk (EHP) and Kuala Lumpur Vertical City (KLVC).
Deputy Economic Affairs Minister Dr Mohd Radzi Md Jidin said Felda will take legal action on the remaining six cases as soon as possible.
“There is no such thing as a cover-up in any of the cases. As I mentioned, we are respecting due process and the rule of law. Although focus is given to the eight cases in the White Paper, it does not mean Felda will not zoom in on other irregular investments and purchases.
“Felda will ensure that all of its corporate management will be based on transparency and accountability in order to restore confidence, especially among Felda settlers,” Mohd Radzi told the Dewan Rakyat yesterday.
He said this in response to a question by Sungai Petani MP Datuk Johari Abdul, who asked why the authorities were not swift in taking action after tabling the White Paper in April.
“The police are currently investigating the EHP and KLVC deals in detail. Felda will give its full cooperation to the police on all investigations. Felda is also committed to assisting the police in all aspects in order to ensure that the investigation process goes smoothly,” Mohd Radzi added.
The Felda White Paper had highlighted eight questionable investments, which contributed to the loss of billions of proceeds received from the listing of FGV Holdings Bhd in June 2012.
Apart from the EPH and KLVC deals, others include Felda’s purchase in Dataran Aras Sdn Bhd, Grand Borneo Hotel Sdn Bhd, Grand Plaza Serviced Apartments, Felda Wellness Corp Sdn Bhd, Park City Grand Plaza Kensington, as well as the Felda House and Grand Felda House.
In 2014, FIC allegedly purchased hotels in London and Kuching at a price that was way beyond the market value. The four-star hotel in Kensington, London, was bought for £60 million (RM330 million), when the actual worth of the property has said to have been at RM110 million. FIC also paid higher for a hotel in Kuching at RM160 million.
Economic Affairs Minister Datuk Seri Mohamed Azmin Ali had previously said RM1.4 billion of cash returns from the listing were spent on investments done through “shady transactions” with another RM2.7 billion allegedly used to gather political support during general elections.
The government has since agreed to inject RM6.23 billion into Felda to restructure the state-owned planter’s multibillion ringgit debt and improve its cash position. The capital injection will be made in stages in the form of grants, borrowings and government guarantees.