KUALA LUMPUR: A total of RM2.7 billion meant to finance the upgrading of Federal Land Development Authority (Felda) plantations was redirected to buy political support instead, it was revealed at the Dewan Rakyat today.
The money, that went to underwrite Barisan Nasional’s (BN) campaign in the 14th general election, was part of the RM6 billion returns from the listing of Felda’s commercial arm Felda Global Ventures Holdings Bhd (FGVH) in 2012, Economics Affairs Minister Datuk Seri Azmin Ali said.
“Datuk Seri Najib Abdul Razak, who was the finance minister at that time, and was also referred to as MO1 or Malaysian Official 1 (in US investigations into 1Malaysia Development Bhd), was involved in the investment process and abuse of Felda funds,“ he added when tabling a white paper to explain the massive losses incurred by Felda and the mismanagement by the previous administration.
“Najib had given orders to speed up the process of purchasing a stake in Indonesian company Eagle High Plantations TBK (EHP) from PT Rajawali Capital at 96% more than the market price,“ he said.
But, he added, the RM2.3 billion investment in EHP was worth only RM500 million as of March this year.
On Tuesday, Felda director-general Datuk Dr Othman Omar lodged a police report claiming that Najib had pushed the agency into investing US$505 million (RM2.07 billion) in EHP.
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.
Azmin also told the Dewan Rakyat that Felda’s debts had risen significantly from RM1.2 billion in 2007 to RM14.4 billion in 2017.
He said the government would now allocated RM6.3 billion to rescue Felda, or at least ensure its sustainability.
He said the infusion of funds was needed to manage Felda’s RM14.4 billion in liabilities given that it now had critical cash-flow problems.
The bailout would be channelled to the agency through grants, loans and government guarantees, he added.
Azmin said more police reports had been lodged over the alleged mismanagement in Felda.
“We will ensure all the culprits are brought to justice,“ he said.
In a new development, Bernama has reported that EHP is contesting Felda’s decision to sell its 37% stake in EHP back to the Indonesian company.
Azmin told reporters that the government had decided to exercise the “put option” that was part of the deal to purchase of EHP.