Malaysia's land development agency Felda, which is struggling with a corruption scandal and an underperforming listed business, is laying off or forcing deep pay cuts on dozens of workers at its welfare foundation.
The Federal Land Development Authority (Felda), announced on Wednesday to the management of its welfare arm Yayasan Felda, that most of its 68 employees will be laid off by the end of the year, The Straits Times has learnt.
The foundation's CEO is paid RM54,000 (S$17,700) a month - a huge salary for a small, non-profit charity.
"It's to restructure Yayasan Felda in line with other equivalent foundations," Felda chairman Shahrir Samad said, when reached by phone.
The foundation, which has an annual budget of RM10 million, manages Felda's colleges, a dialysis centre and charities for plantation settlers' and their families.
"We are not discontinuing Yayasan Felda but of course we need to restructure it," said Tan Sri Shahrir.
While the number of those losing their jobs might seem small, the move reflects how Felda - a hallowed name among Malaysian Malays due to its history of alleviating poverty - needs to take painful steps to rebound from its problems.
It's not a big foundation and yet we have a CEO who's paid RM54,000 a month. He doesn't realise he is overpaid. At RM54,000, I think it is a bit too much.
DATUK SERI MANAN, Yayasan Felda chairman, on the salary of its chief executive.
Former chairman Isa Samad was removed from his post by Prime Minister Najib Razak in January and is facing a corruption probe over millions of dollars allegedly spent on buying hotels at inflated prices.
Felda's listed Felda Global Ventures (FGV), specialising in palm oil production, has performed poorly on the stock exchange since its listing in 2012. This has led Datuk Seri Najib to bail out thousands of Malay Felda farmers who had borrowed money to buy FGV shares.
On Wednesday, a management-level source told The Straits Times that the foundation's 68 employees will either have their jobs terminated, opt for voluntary resignation or take a pay cut. An official letter is expected to be issued this week.
Salaries, which foundation chairman Manan Ismail has said were "too high", will be revised.
"We need to reduce the expenditure for the foundation and concentrate on providing more benefits to the settlers," Datuk Seri Manan told The Straits Times.
"It's not a big foundation and yet we have a CEO who's paid RM54,000 a month. He doesn't realise he is overpaid. At RM54,000, I think it is a bit too much".
Yayasan Felda, which receives RM10 million annually from Felda, is led by chief executive Emel Faizal Mohd Mokhtar, who was appointed to the role in 2011 by Mr Isa.
The move to streamline one of Felda's subsidiaries comes right before a general election that must be held by August next year, and next week's annual assembly for Malaysia's ruling party Umno, which relies heavily on Felda settlers' support.