KUALA LUMPUR: Some RM2.7 billion of Federal Land Development Authority (Felda) money meant to upgrade its plantations was used to buy political support before the last general-election, Economic Affairs Minister Datuk Seri Azmin Ali (pix) told the Dewan Rakyat today.
He said this when tabling the White Paper on Felda in Dewan Rakyat to explain Felda’s massive losses and its mismanagement during the previous government’s administration.
“The RM2.7 billion was part of the RM6 billion the land scheme earned from listing its commercial arm Felda Global Ventures Holdings (FGVH) in 2012.
“Datuk Seri Najib Abdul Razak, who was also the finance minister was involved in the investment process and abused the Felda funds.
“Najib requested to accelerate the for process of the purchase of Indonesian company Eagle High Plantations TBK from PT Rajawali Capital, at a market rate that was 96% higher than the actual rate,” he said.
Azmin added that as of March this year, the RM2.3bil investment (Eagle High TBK) is now worth only RM500mil.
On Tuesday, Felda director-general Datuk Othman Omar lodged a police report claiming that Najib had pushed it into investing US$505mil (RM2.07bil) in Eagle High.
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 added that Felda’s debts had drastically risen by 1,100% from RM1.2bil in 2007 to RM14.4bil by 2017.
Meanwhile, Azmin said that the government will allocate RM6.3 billion to rescue or ensure the sustainability of Felda.
He said the infusion is needed to manage Felda’s RM14.4 billion in liabilities as the agency has critical cash-flow problems.
The bailout will be channelled via grants, loans and government guarantees.
He also added that Felda will be introducing a new model for managing settlers’ land through land rental for a reasonable period.
“The government has agreed to allocate RM1 billion for a period of four years to implement this new idea. This model will resolve demographic issues of the settlers and the absence of economies of scale,“ added Azmin.
“The introduction of this new model will enable the settlers’ land to be consolidated and to be cultivated efficiently, and also the economies of scale can reduce operating costs and increase productivity,“ he added.
He said Felda is determined to develop skilled and innovative new settlers to improve income through agricultural and livestock activities which use new technologies such as smart farming and precision agriculture.
“This effort will help settlers to reduce dependence on palm oil. On the contrary, it will enable settlers to generate new income that is high value through harvesting in a short period,“ he added.