Felda lodges police report over Eagle High deal

09 Apr 2019 / 23:29 H.

KUALA LUMPUR: The Federal Land Development Authority (Felda) has lodged a police report alleging that it overpaid for a 37% stake in Eagle High Plantations PTK (EHP) in 2015.

Its director-general Datuk Dr Othman Omar claimed that the price was deliberately inflated by almost 450% to RM2.3 billion when it was valued at only RM440 million at the time of purchase.

Othman, who lodged the report on behalf of Felda, claimed the purchase was made on the orders of Datuk Seri Najib Abdul Razak when he was prime minister and finance minister.

EHP is an Indonesian company with interests in oil palm plantations and the processing of palm oil. It is owned by Tan Sri Peter Sondakh, founder and head of Rajawali Group, also an Indonesian company.

The purchase by Felda was made through its special purpose vehicle FIC Properties Sdn Bhd.

Federal Commercial Crimes Investigations Department director Datuk Mazlan Mansor told theSun today that the police commenced investigations as soon as they received the report. He declined to comment further.

According to business portal theedgemarkets.com, Felda also named several other individuals in its police report for involvement in criminal breach of trust, criminal conspiracy, corruption and money laundering.

Among them were former top officials of the agency as well as a minister and deputy minister.

Othman reportedly said in his report that Felda was compelled to obtain a RM2.5 billion loan from GovCo Holdings Bhd, a subsidiary of the Finance Ministry, to make the purchase.

“As a result, the plantation giant suffered losses amounting to RM1.576 billion as of Dec 31, 2017,“ he said, adding that Felda’s stake in EHP was now worth only RM555 million.

He said the purchase was “riddled with many risks” and that EHP did not even have the Roundtable on Sustainable Palm Oil accreditation, “nor did it look like it would achieve it in another 10 years”.

In an immediate response, Najib said in a Facebook post today that the purchase of the EHP stake came with a “put option” that would enable Felda to dispose of the 37% stake at the purchase price plus 6% returns per year, that would be borne by the seller (Rajawali).

“In other words, if we do not want to hold on to the investment, we can reclaim all the money we have paid, together with the 6% interest every year,“ he said, adding that the loan to pay for the purchase came at an interest of 3.85% per annum.

“This means that if the company is successful and the price of palm oil is recovering, there will be more to gain from the investment.”

He said the government would still make a profit if the stakes were sold back to the seller because the interest to Felda would be higher than the cost of its debts.

“Therefore, the people’s money is still protected and they will not suffer a loss,“ he said.

Najib claimed the main reason Felda suffered huge losses was because the price of palm oil dropped below production cost.

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