Felda was cheated in Eagle High purchase, says director general
KUALA LUMPUR (April 9) – Federal Land Authority (Felda) director general Datuk Othman Omar had yesterday evening lodged a police report at the police commercial crime unit here, claiming that it was cheated into entering into a “one-sided” deal for the sale and purchase of Eagle High Plantations TBK (EHP) owned by the Rajawali Group two years ago.
Othman claimed that then Prime Minister, Datuk Seri Najib Razak, cum Finance Minister, had directed Felda to invest in EHP through the 37 % stake and this is contained in the Finance Ministry letter to Felda on Dec 8, 2015, where else EHP have total debts of US$547.4 million in 2014 and its liability was US$676.9 million in 2016.
The purchase of EHP, owned by Rajawali’s Tan Sri Peter Sondakh, whom it claims is Najib’s friend, was done through its special purpose vehicle FIC Properties Sdn Bhd (FPSB) said Othman.
The director general alleged that the efforts to purchase EHP shares were offered to several agencies including FGV Bhd, Malaysian Plantation Oil Board (MPOB) and Malaysian Rubber Board (MRB) before it was “forced” on Felda.
Othman claimed the agreement to purchase EHP is one sided to Rajawali’s benefit as it involves payment of more than US$505 million equivalent to RM2.3 billion where else the Finance Ministry and Felda realised there are many risk involved in the deal.
He said other factors making it a one sided affair is that EHP does not possess the Roundtable on Sustainable Palm Oil (RSPO) accreditation and according to documentary evidence, the company would not be able to achieve RSPO certification even after 10 years.
Othman further claimed that the purchase of EHP as approved by Felda was at a more than 300% inflated price where the approved purchase is at US$505 million where else the value of its 37 % acquisition was only US$114 million.
He said Felda/FPSB purchase was against consultancy advice made including by KPMG Malaysia dated Feb 16 and Nov 11, 2016, BDO Malaysia evaluation report dated April 29, 2016 and Indonesian law firm Hiswara Bunjamin dated Nov 10, 2016 and JP Morgan slides tabled on Dec 23, that same year.
As such, Othman alleged Felda and its subsidiaries should not have entered into the purchase of EHP stake for US$505 million as it does not have the financial capacity.
The director general further claimed that Najib and his allies at the Prime Minister’s Office, Finance Ministry and Felda board of directors had caused Felda to get a loan from GovCo Holdings Bhd (GovCo), a subsidiary of the Finance Ministry under Najib’s watch through a RM2.5 billion loan.
Othman further alleged that as a result of having to take the loan, Felda suffered a RM1.576 billion losses as off Dec 31, 2017, and this affected Felda and its subsidiaries performance.
“As a result of the purchase at RM2.3 billion by Felda, it had suffered losses when the value of purchase is now just RM555 million as off last month,” he said in the police report.
The director general suspects that the EHP agreement which resulted in losses for Felda, is as a result of Najib directing Felda for its investment on Sondakh’s interests in EHP and that Sondakh uses his influence on Najib resulting in Felda to purchase the stake at an inflated price of more 344 %.
Othman said former Felda chairperson, Tan Sri Mohd Isa Samad played his role in signing the EHP agreement due to his position as FPSB chairperson.
The director general also claimed several senior Finance Ministry officials along with a former minister (Datuk Johari Abdul Ghani) and former deputy minister (Datuk Razali Ibrahim) had wielded their influence to go ahead with the purchase.
He suspected that some of the previous board of directors are involved in criminal conspiracy to cheat and cause Felda to suffer losses through the EHP agreement resulting in Felda to enter a deal to get a loan from GovCo.
Othman added that as Isa was replaced by Tan Sri Shahrir Samad, as Felda chairperson, he suspects that Shahrir had also caused the US$505 million payment be made in 2017.
He further named seven individuals whom he claimed are involved in criminal conspiracy, criminal breach of trust, possible graft involving public officers and cheating and asked the authorities to investigate on it.
The director general also believes that some maybe involved in money laundering.
Previously, The Edge had since last June questioned the purchase of EHP. It was also reported that FGV had also filed a suit against Isa, its former chief executive officer and president Emir Mavani Abdullah and 12 of its former directors for breach of fiduciary duty where the suit is pending at the High Court here.
Earlier this year, several media reported that Felda wants to dispose its stake in EHP.
Othman also lodged a separate police report over the Kuala Lumpur Vertical City project which he claimed also causes losses to Felda where he suspected there are similar offences as stated above.