MoA to talk to AG on NFCorp buyout issue

by SHAHEERA AZNAM SHAH & RAHIMI YUNUS/ graphic by TMR

THE Agriculture and Agro-based Industry Ministry (MoA) will consult the Attorney General’s Chambers (AGC) to iron out any legal obstacles related to the takeover of the National Feedlot Corp Sdn Bhd (NFCorp).

Minister Datuk Salahuddin Ayub said the consultation with AGC is critical to facilitate the proposed takeover of NFCorp which had been dogged with legal issues and debts worth millions owed to the Ministry of Finance (MoF).

“I think this is the last attempt for MoA to facilitate the takeover. There are legal issues that need AGC to come on board,” Salahuddin told The Malaysian Reserve in an interview recently.

Salahuddin has also proposed a special meeting involving the prime minister, MoA, MoF, AGC and the related parties to address the debt issue involving NFCorp.

MoA wants to avoid any legal implications, especially relating to the related infrastructure built for the project.

“The legal matter is not on financing. The previous company asked us to build the infrastructure such as roads and cow barns.

“The prospective buyer must be able to absorb all these losses and does not implicate anything on MoA after the takeover,” he said, adding that the ministry had spent about RM40 million of NFCorp’s infrastructure.

Salahuddin said any buyer must settle the RM250 million NFCorp debts and seeks the relevant approval from the state government in relation to the land rights.

“The ministry can provide technical support in terms of cattle farming and its resources to help the company move forward, but they must be able to settle the debt,” he said.

NFCorp had received a RM250 million soft loan from the government and RM13 million grant to launch the cattle-farming project located in Gemas, Negri Sembilan.

The financial assistance was part of the government’s initiatives to improve the country’s ruminant self-sufficiency levels (SSL).

However, the project triggered a firestorm in 2010 when the Auditor-General’s report flagged its poor performance after it only produced 3,289 heads of cattle or just 41% of the 8,000 target.

The government had filed a suit against NFCorp and 10 others to reclaim RM253.6 million that was loaned to the company.

The suit also named Datuk Dr Mohamad Salleh Ismail, the husband of former Women, Family and Community Development Minister Tan Sri Shahrizat Abdul Jalil, and their three children.

The government filed the suit to claim RM253.6 million, which is owed by NFCorp, from the company and Mohamad Salleh’s family, with an interest of 2% a year.

It was reported that there are interested parties who want to acquire NFCorp, including to pay all the debts owed by the company to the government.

But the legal suit would make any straight takeover difficult. Meanwhile, Salahuddin said the ministry is considering various models for cattle farming to raise the SSL for ruminants and slash our dependency on imported livestock.

“The ministry is committed to increasing the local beef production to 30%. We are considering various models of cattle farming, including an integrated farming within oil palm plantations and strengthening the breeding programme,” he said.

Salahuddin added that supplying grain corn for animal feed has been one of the industry’s challenges.

“The animal feed is one of our difficulties as we have been stagnant in the production of local grain corn,” he said, adding that the ministry has identified soybean and palm kernel cake as substitutes with similar protein content.

Salahuddin said the ministry will engage with the Ministry of Primary Industries (MPI) to reserve the country’s palm kernel cake to assist the ruminant industry.

“We will discuss with MPI to limit the palm kernel cake export. We need a policy on this to sustain the sector’s animal feed supply,” he said.

Last year, the government spent RM3.1 billion in providing subsidies for livestock breeding. The country produced 2.6 million tonnes of palm kernel cake in 2018, of which about 90% are exported.