The failure of governance by the previous Felda management, a sharp decline in its cash position and several issues related to settlers, were the causes behind the agency’s losses and high debts.
It is understood that the three causes will be included in the Felda-related White Paper report which is expected to be tabled at the Dewan Rakyat sitting next Monday.
An unnamed source told Berita Harian the problem in Felda’s governance and its cash decline started with the failure of the agency’s top management in making the right investment decisions, as well as the use of revenue from FGV Holdings Bhd’s (FGV) listing in 2012.
“All of this will be touched in the report,” the source was quoted as saying.
The source also added that the element of fraud in investments, including overseas ones which involved several important individuals in Felda before this has worsened its financial situation.
For example, the source said, two main positions in FGV and Felda were previously held by two same individuals who were political leaders from the previous Barisan Nasional (BN) government, while some members of the Felda Group’s board of directors also filled their positions through political appointments.
“This is a problem (with Felda) in making judgments and decisions,” the source said,
Additionally, the source said it will be up to the responsible minister to decide whether the details of the failed and misappropriation of investments will be disclosed in the White Paper.
The source also told Berita Harian that the excessive giving of “political candies” by using the revenue from FGV listing for grants also led to the decline in Felda’s cash position since 2013.
“These political candies include ‘durian runtuh’ to the settlers through the government’s announcement, besides the one-off aid, amounting to more than RM1 billion,” the source added.
The source said that such grants meant that less than 25 per cent of revenue earned by Felda through FGV listing could be reused for short and long term investments.
“The situation is getting worse as settlers who borrowed from Felda do not pay back,” the source said, adding that the funding was for replanting and modifying their houses.
It is understood that the details on the “candies” and settler’s debts will be explained in the White Paper, said the source.
The revenue from the FGV listing was also used by the then BN government to improve the country’s infrastructure with cost reaching hundreds of millions, added the source.
“Through the implementation of such projects, this is believed to have led to the manipulation and mismanagement of Felda,” the source said.
As of last June, Felda was reported to be in debt of about RM8 billion.
Previously, it was reported that FGV filed a suit on 14 former management and board members including former Group President and Chief Executive Officer Datuk Mohd Emir Mavani Abdullah and former Chairman and Non-Executive Director Tan Sri Mohd Isa Abdul Samad.