The Federal Land Development Authority (Felda), a hallowed government agency among Malaysian Malays, had debts of RM6 billion (S$1.9 billion) as at 2014 - according to its last audited statements - despite raising the same amount in a public listing just two years earlier.
Adding to this was the shocking revelation last month that several senior officials of Felda were being probed by the anti-graft commission in an alleged RM146 million scam to start a sturgeon farm in Pahang to harvest caviar. And, Felda is shelling out US$505 million (S$715 million) to buy a large stake in an Indonesian palm oil company that financial analysts say is overpriced.
Faced with this, the government last month removed Felda chairman Mohd Isa Samad and replaced him with former Cabinet minister Shahrir Samad.
Since then, five current and former Felda officers have been investigated over the caviar farm.
The Felda Investment Corporation board has been sacked, and Tan Sri Shahrir vowed he will not be "protecting anybody".
He told The Straits Times in an interview that he has given himself one year to turn things around.
"I have this one year to bring everything back to normal," Mr Shahrir said, relating that he had told Prime Minister Najib Razak: "I hope you don't mind if there is blood on the streets. He didn't say no (to my plan)."
If the veteran lawmaker fails to rectify Felda's battered image in the public's mind, it will not be just another failed government agency that the public might accept. A lot is at stake for the Malay nationalist party Umno that leads the ruling Barisan Nasional (BN) coalition.
Felda lands have been settled since the 1960s by 112,000 Malays. They, their descendants and their families - now totalling some 1.2 million voters - form a big chunk of pro-government supporters in 54 federal parliamentary wards out of a total of 222, or 24 per cent.
Mr Shahrir was asked if the government's plan to have an initial public offering (IPO) for part of the plantation land grouped under Felda Global Ventures had been a mistake. "I don't think the IPO can be said to be a mistake. It is how you manage your new-found wealth that is the mistake... You want to have a sturgeon farm... the behaviour was certainly over-the-top," he said."If I can improve the lot of the settlers... they will understand that they are back to where we are (supposed to be)."
Mr Shahrir put Felda's troubles in the past four years down to "leakages" - a Malaysian synonym for corruption - in management, and a lack of strategic thinking combined with low palm oil prices.
This resulted in billion-ringgit losses and cash-flow problems.
"The board was struggling to contain (the former director-general)... Companies were set up, money was spent. Eventually, the board lost patience with him and he was taken out. But the damage was done - there is no money now," he said.
Felda director-general Faizoull Ahmad was suspended in December 2014 and subsequently replaced in April 2015.
Mr Shahrir is not content to just turn Felda around - he wants to wean the children of the original settlers off Felda's assistance. The second and third generation still get aid for housing and other loans that make life easier for them, thus making them staunch BN supporters.
"Looking at Felda to look after the second, third, fourth generation... when do we stop? Problems of the second generation are the same everywhere, whether you are the son of a Felda settler (or not) - affordable homes, getting employment," he said. "There should not be any distinction. That would be unhealthy in the long run."
Shannon Teoh
