Press Statement : 2017 – “FELDA Year”

Press-Release

PRESS STATEMENT : 2017 – “FELDA Year”

Transparency International Malaysia (TI-M) is concerned with the ongoing and seemingly endless saga on malpractice, corruption and breach of trust and duty cases latest affecting FELDA – the last case reported being the questionable Felda “Semarak” land transfer deal. In fact the year 2017 can be perhaps be named as the “FELDA Year” for the series of news of happenings which has caught the attention of us average Malaysians.

It appears that it is not only FELDA investors (including the hard working settlers and planters) and the public who are not happy with these cases – discontent seems to be seen from even within the Umno and BN circles.

It is believed that besides Khazanah and PNB groups of companies, the GLC sector is the biggest source of threat to financial stability due to their being closely linked to political parties, and fraught with lack of good governance and transparency.  There are also allegations and suspicion of widespread favoritism, cronyism and corruption in such corporate entities. Lately, FGV have taken drastic actions by appointing professional subject matter experts to strengthen the composition of the FGV Board and senior management. But to actually make a change, there must be true and fearless intent to make sincerity and integrity an integral part of the corporate culture by setting the “tone at the top”.

To recap the sad narrative – the year 2017 started with the hopeful appointment of a new chairman. The appointment was supposedly in line with the Government’s desire to strengthen and solidify FELDA’s leadership. Such noble intentions was very quickly called into question.

In April, Felda Investment Corporation Properties Sdn Bhd (FICP), a special purpose vehicle of Felda, acquired 37 percent of loss making PT Eagle High Plantation Tbk. Settlers, analysts and investors showed their disapproval towards this acquisition done at a very high premium with a price that lacked financial and commercial justification. A few months later, Felda’s current chairman said FELDA was merely an “intermediary” for the Malaysian government in the acquisition. Is this how FELDA is to be viewed – an intermediary of the Government?

Subsequently in June 2017, there was a management crisis at FGV where Malaysian Anti-Corruption Commission (MACC) investigated several company officials for alleged corruption and abuse of power. The prime minister’s office also got involved, asking a former cabinet minister to look into the suspension of FGV’s top executives.

Its CEO denied wrongdoing and refused to step down as instructed by the then chairman. Shortly afterwards, FGV announced the resignation of the chairman, Tan Sri Isa Samad from the company and its subsidiaries and later was appointed the acting Land Public Transport Commission (SPAD) chairman.  His appointment has continued to raise eyebrows amongst the public bearing in mind his questionable “track record” in FELDA.

In August, MACC arrested the said former FGV chairman in a corruption investigation into FICP’s purchases of two hotels in London and Kuching between 2013 and 2015, said to be above their market value.  Until today there is no decision made yet on this case.

Later in Dec 2017, to cap the end of an eventful year for FELDA it was reported that there was a transfer of title for FELDA’s the 16-hectare land (the old Felda headquarters, Anjung Felda and Wisma Felda) at Jalan Semarak for which Felda did not receive a single sen. The present Felda chairman was reported to have described the matter as a “dubious deal” and discovered it in January 2016. On 23rd December 2017, the PM vowed action to be taken against any negligence or misconduct in the land ownership transfer. Due to the seriousness of the scandal PM should impose a deadline on the police and the Attorney General’s Chambers to complete investigations on this “dubious deal” which has taken such a long time to surface. They must take action without fear and favour.

To be sure the rakyat are watching and will judge to see whether all these current cases will be allowed to proceed with due legal process, or will they take a sudden turn and end up like other lost cases which were announced with much fanfare, only to end with a whimper. If this happens the rakyat will surely suspect a “cover up” and abuse of legal process and failure of the rule of law.

TI-M strongly feels that the federal government should appoint a forensic auditor to conduct a full forensic audit on both Felda the holding company and its subsidiaries to ensure that if any malpractices are found to have taken place, it should be looked into and punitive actions are taken against the officers who are involved.

The public has a right to know since Felda is a government agency which is funded by tax payers’ money and the hard labour of the FELDA settlers and as such should be properly managed. A corporate entity which is not properly managed and with no proper corporate governance in place will never be sustainable in the long run.

GLCs are recruiting top talents, for example, previous corporate leaders, retired government servants and others for their boards in for experience, expertise or networking purposes and not political cronies.  Institutional investors, corruption and credit rating agencies are also watching to see how serious Malaysia is in tackling corruption of this nature in GLCs.

No person should take advantage of their position in Felda and its subsidiaries to commit malpractices for their own benefit and be let free without any criminal charges against them and whosoever they may be acting for. Only a conviction and deterrent punishment action against such perpetrators will help to ensure no recurrence of such scandals in the future.

What will 2018 be for FELDA?  The Rakyat wants to see a “real clean-up”, accountability to the law for the wrongdoers and restitution for any losses from wrongdoing.  Will the Government deliver?  Rest assured the Rakyat are watching and waiting and will make their judgment.

~ END ~

Akhbar Satar

 

 

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