Felda says defrauded of S$89 mil in land deal, adding to its other financial woes

Malaysian land agency Felda says it was defrauded in a 2014 case involving four plots of land in Kuala Lumpur.
Malaysian land agency Felda says it was defrauded in a 2014 case involving four plots of land in Kuala Lumpur.PHOTO: REUTERS

KUALA LUMPUR - The chairman of Malaysian land agency Felda said on Thursday that it had been defrauded of RM270 million (S$89 million) in a case involving four plots of land in Kuala Lumpur.

The 2014 case involving the Federal Land Development Authority (Felda) and a company that it did not name was uncovered earlier this month, said its chairman Shahrir Abdul Samad, The Star newspaper reported on Thursday (Dec 21). The plots of land are located in Jalan Semarak in downtown KL.

"We were shocked when we found out about the transaction involving millions of ringgit, but Felda did not receive a single sen from it," Tan Sri Shahrir told a news conference at Felda headquarters on Thursday.

Mr Shahrir said apart from the police report, Felda was also looking at revoking the Power of Attorney given to the company concerned and registering a caveat on the land.

He also did not discount the possibility of taking civil action against the company and appointing a third-party auditor to look into the deal, The Star report said.

The case could present a fresh headache for Prime Minister Najib Razak just ahead of the general election, as it added to other financial woes engulfing Felda and its listed unit Felda Global Ventures (FGV).

Felda is close to the hearts of many Malaysian Malays due to its history of alleviating poverty among the majority race.

The agency looks after the welfare of some 1.2 million Malay farmers and their multigenerational families, who are mostly staunch voters of the ruling Barisan Nasional coalition.

These families form the majority of voters in 54, or nearly a quarter, of the 222 Malaysian parliamentary constituencies.

Felda has been in the news this year after its former chairman Mohd Isa Samad was replaced in January. He was in August questioned to help in a corruption probe, allegedly involving the land agency overpaying by hundreds of millions of ringgit for two hotels in London and Sarawak.

FIC, Felda's investment arm, was alleged to have purchased the Park City Hotel in Kensington, London, for RM330 million, thrice its supposed market value, while a four-star property in Kuching, Sarawak, was bought for RM160 million, when it was supposedly worth RM110 million.

Tan Sri Isa, once Negeri Sembilan's chief minister, was appointed Felda chief in 2011.

The shares of FGV had also fallen sharply, affecting thousands of these Felda farmers who bought the shares in anticipation of good dividends and a spike in the share price.

To placate the farmers, PM Najib in July announced that 94,956 eligible families would be given RM5,000 each - costing the government RM475 million - as a cash handout.

Also, additional funds amounting to over RM950 million would be given out to erase the debts of the farmers.

He had also announced that a portion of loans taken out by these farmers to buy FGV shares, which had fallen shaprly in value, would also be waived.