KUALA LUMPUR: Based on the audit of the corporate governance, financial position and principal activities, the objectives of the establishment Forest Plantation Development Sdn Bhd (FPDSB), a wholly–owned subsidiary of the Malaysian Timber Industry Board under the Ministry of Primary Industry (MPI), have been met, said the Department of National Audit.
In its Auditor–General’s Report 2018 Series 1 on the management of the Federal Government’s companies released today, it said FPDSB’s financial position was stable as it had received operating grants and development loans from the Ministry of Finance and MPI for the period of 2015–2017, to cover its operating expenses and funding for the Forest Farm Development Programme (PPLH).
“However, in terms of corporate governance of the FPDSB, it was not satisfactory and needed to be improved, in line with the corporate best practices.
“Based on the management of the implementation of PPLH soft loans and Nurseries Development Programme (PPTS) that had been audited, it was found as generally inefficient despite the output and outcome were efficient and effective.
In terms of output and outcome, the Auditor–General said FFPDSB had successfully disbursed 81.8% (RM862.63 million) of RM1.055 billion of the loans and grants it received to 64 companies.
“Loans disbursement involved 91.9% (119,463.81ha) of the area approved for the development compared to the target of 130,000 ha to be achieved by 2020,” it said.
FPDSB was incorporated on Feb 13, 2006, under the Companies Act 1965 with paid–up capital of RM10 million and was licensed on Jan 12, 2009, as a lender in accordance with Moneylenders Act 1951.
It is a special purpose company that was established following the Cabinet’s decision on March 2, 2005, aims to undertake the financing programme (soft loan) for PPLH.
Its objectives are to encourage the establishment of commercial forest farms, maintaining raw materials for the timber industry, as well as increasing investments in the industry. — Bernama
