KUALA LUMPUR – Felcra and its subsidiaries owe the government a total of RM1.532 billion, the Public Accounts Committee (PAC) revealed today.
Of this amount, RM309.8 million is associated with Felcra’s estate joint ventures, while Felcra Properties alone owes RM842.7 million.
These debts were restructured and rescheduled for a period of 35 years by the government through cabinet approval on August 11, 2021.
In a statement, PAC chairman Datuk Mas Ermieyati Samsudin said that under this restructuring exercise, Felcra will begin repaying the debt in 2026, with monthly payments of RM4.6 million to the Finance Ministry.
She said the government had also loaned Felcra RM544 million for the development of the Semarak20 commercial project in Kuala Lumpur.
“Through detailed proceedings on this matter, PAC found that the GLC did not have the expertise for a commercial project as large as Semarak20.
“Felcra tried different types of businesses through its subsidiaries, but it didn’t make money. Instead, it added more debt to finance their operations,” she said.
Felcra is wholly owned by Minister of Finance Inc (MoF Inc), but is supervised by the Rural and Regional Development Ministry (KKDW).
PAC has recommended that Felcra review its structure and operations to realign with its original goals and social responsibilities, prioritising the protection of participants’ and rural communities’ interests.
“Additionally, the committee urged KKDW and Felcra to enforce strict regulations on the company’s subsidiaries to ensure profitability and goal attainment.
“Before expanding beyond its core business, Felcra should enhance its organisational capacity,” she said.
As for the Semarak20 project, the PAC also said that MoF Inc, the Finance Ministry, KKDW, and Felcra must develop a comprehensive strategy.
“This strategy aims to ensure Felcra’s success by facilitating debt repayment to the government and bolstering the company’s financial position,” she added.
Furthermore, PAC has also instructed KKDW and Felcra to provide updates on the current status of debt repayment and the implementation of the Semarak20 project strategy every three months.
Mas Ermieyati said the committee will review these updates to monitor progress.
“The MoF Inc, MoF, KKDW, and Felcra have been given a two-month deadline to respond with their plans for addressing the PAC’s five recommendations,” she added.
Former Felcra Bhd chairmen Datuk Seri Tajuddin Abdul Rahman and Datuk Bung Mokhtar Radin were also summoned by PAC for an inquiry over the matter.
The Auditor-General’s Report 2021 Series 2 stated that Felcra’s debt arrears amounted to RM312.22 million as of December 31, 2021, up from RM82 million in the preceding year.
The Accountant General’s Department also found that Felcra owed the government RM3.67 billion as of December 31, 2021.
The federal government also did not receive dividends from Felcra between 2019 and 2021.
It was reported that the RM312.22 million loan had been converted from a government loan to equity and was approved by the Dewan Rakyat on August 4, 2022. – June 26, 2024