Opposition Leader Anwar, who a day ago made a triumphant return to Parliament after a 6-month suspension for crossing Prime Minister Najib Razak over his prized 1 Malaysia slogan, has dropped the latest bombshell on financially-precarious Felda - accusing it of losing RM500 million over a period of 3 years.
Felda is a rural land resettlement scheme initiated by Najib's father, the second prime minister to help the poor Malays make a living by tilling the land and contributing to the nation's agriculture sector. The corporatized agency has been under Najib's stewardship since 1997.
Anwar said in a statement that while Felda - the parent company - might look strong in its financials, huge overseas losses incurred by its investment arm Felda Global Venture have built up that could plunge the entire group into financial chaos.
The RM6billion question
According Anwar Global Ventures used money borrowed from the Employee Provident Fund to invest in the US, Canada and the Middle East and during the period 2007 to 2010, has racked up accumulated losses of RM500 million.
"Felda Iffco Sdn Bhd, Twin Rivers Technologies US, TRT-ETGO Canada, Felda Global Ventures Middle East and also Felda Global Ventures Arabia have all suffered accummulated losses from the years 1997 to 2010 amounting to the sum of RM500 million and the stupidity of the management of Felda Global Ventures is just as great if not greater than the mismanagement of Sime Darby," said Anwar, a former deputy prime minister and well-respected Finance minister.
"With Felda Global Ventures suffering such a massive loss in its overseas investments, we believe that the loan from EPF will not be repaid, but the repayment period will be extended and this will be borne by the Malaysian citizens. We believe that the Prime Minister has no knowledge of the terrible losses incurred by Felda Global Ventures in its overseas investments as the losses have been concealed by the massive profits made by Felda Global Ventures in its annual palm oil trading activities."
Najib only took over as prime minister in April 2009. During the first part of the period mentioned by Anwar, the prime minister had been Abdullah Badawi.
Anwar also pointed that a key Najib adviser, Omar Mustapha, had been appointed as a consultant to Felda Global Ventures, even though he had no experience in agricultural methods.
Profits from commodity price rises hiding the overseas losses
He had on Thursday raised a query in Parliament, did Felda borrow RM6 billion from EPF. No answer was forthcoming from BN ministers, especially deputy minister in the PM's department, Ahmad Maslan, who helps Najib to over the Felda portfolio.
He also called for andepth probe similar to the one carried out on conglomerate Sime Darby, which also lost money in its overseas ventures.
"If it is true that the Felda Group has borrowed RM6 billion from the Malaysian citizens via the EPF, we demand that an investigation be made into the activities of the Felda Group similar to what is being done in regards to the investigation on Sime Darby's activities and those in the Felda Group, for instance, its Chief Investment Strategy Officer, Suzana Wati Idayu Othman and its board of directors who are guilty in making these decisions that made Felda Group incurred such massive losses should be held responsible for their negligence in carrying out their duties," said Anwar.
According to Anwar, out of this sum, RM3 billion was loaned to Felda Global Ventures, which the unit used to invest overseas.
Felda Global also handles the palim trading activties of the Felda group and has made huge profits in this area as global commodity prices soared. It was this profit that was used to hide the huge overseas investment losses.
The worst-ever investment in corporate Malaysian history
Anwar singled out the Twin Rivers Technologies investment as the single worst loss in the Felda overseas portfolio.
"We believe the investment that was made under the name of Twin Rivers Technologies US, a factory processing food and protein fats in the United States of America is the worst investment ever made in the corporate history of Malaysia," said Anwar.
"We believe that the overall investment of Twin Rivers Technologies US inclusive of its subsidiary is around RM1.175 billion. Although the investment is massive, we believe that Twin Rivers Technologies US has incurred losses every year from year 2007 to year 2010 with the amount close to being RM500 million."
He demanded that Najib and those responsible at Felda take responsibility for losses, should a probe prove that there were indeed such massive losses.
"Under the Felda Act, all the investments of Felda Group, in principle requires the approval of the Minister who is responsible for Felda, which since 1997 has been Dato' Seri Najib Tun Razak," said Anwar.
"Whether the investment losses have been revealed to Najib or not revealed to Najib by the management of Felda Global Ventures, the responsibility of the losses must be borne by Felda Global Ventures and Najib. An investigation must be ordered into the matter and the results of the investigation revealed to the Malaysian citizens."
Malaysia Chronilce appends below the full statement from Opposition Leader Anwar Ibrahim, who is also the Permatang Pauh MP
Malaysian citizens have the right to know all information pertaining to Felda Global Ventures Sdn Bhd and its parent body the Lembaga Pertubuhan Felda, including the losses suffered by the subsidiaries and not only the main Group.
This is vital because we believe that Felda Global Ventures and Lembaga Pertubuhan Felda have borrowed about RM6billion from the Employees Provident Fund, which of course is money belonging to the Malaysian citizens. Lembaga Pertubuhan Felda had firstly borrowed RM6billion from EPF, out of which RM3 billion it loaned to Felda Global Ventures.
Why was the borrowing done by Felda without the Bill being tabled in Parliament, where the voice of the Malaysian citizens are being represented? Who authorised the EPF to loan such a big sum to the Felda Group? We also believe that overseas investments undertaken by the Felda Group using the funds borrowed from EPF have all incurred losses.
We believe that all the overseas investments undertaken by Felda Global Ventures using the borrowed funds from EPF and investing under the names of Felda Iffco Sdn Bhd, Twin Rivers Technologies US, TRT-ETGO Canada, Felda Global Ventures Middle East and also Felda Global Ventures Arabia have all suffered accummulated losses from the years 1997 to 2010 amounting to the sum of RM500 million and the stupidity of the management of Felda Global Ventures is just as great if not greater than the mismanagement of Sime Darby.
With Felda Global Ventures suffering such a massive loss in its overseas investments, we believe that the loan from EPF will not be repaid, but the repayment period will be extended and this will be borne by the Malaysian citizens. We believe that the Prime Minister has no knowledge of the terrible losses incurred by Felda Global Ventures in its overseas investments as the losses have been concealed by the massive profits made by Felda Global Ventures in its annual palm oil trading activities.
In reality, the profits from the palm oil trading by Felda Global Ventures have been used to subsidise the overseas losses suffered by Felda. The Prime Minister has proudly praised Felda Global Ventures for its overseas investments, but it is really shameful as we believe that in actual fact, nearly all the overseas investments made by Felda Global Ventures have incurred losses.
We are made to understand that the investment that was made under the name of Twin Rivers Technologies US, a factory processing food and protein fats in the United States of America is the worst investment ever made in the corporate history of Malaysia. The early investment sum totalling RM175 million was forked out to buy over Twin Rivers Technologies US which was sold by Procter & Gamble.
We are made to understand that after buying over Twin Rivers Technologies US, the Bank of America has made a demand for the loan amounting to USD100 million owed by Twin Rivers Technologies US. Felda Global Ventures then borrowed RM300 million from CIMB to pay Bank of America.
It also came to our knowledge that Felda Global Ventures have spent around RM600 million for a processing factory in Canada under a subsidiary of Twin Rivers Technologies US which goes by the name of TRT-ETGO Canada which until to-date has never made any profits.
Did Felda Global Ventures give anymore loans to TRT-ETGO Canada amounting to the sum of RM100 million? Due to this, we believe that the overall investment of Twin Rivers Technologies US inclusive of its subsidiary is around RM1.175 billion. Although the investment is massive, we believe that Twin Rivers Technologies US has incurred losses every year from year 2007 to year 2010 with the amount close to being RM500 million.
The people responsible
If it is true that the Felda Group has borrowed RM6 billion from the Malaysian citizens via the EPF, we demand that an investigation be made into the activities of the Felda Group similar to what is being done in regards to the investigation on Sime Darby's activities and those in the Felda Group, for instance, its Chief Investment Strategy Officer, Suzana Wati Idayu Othman and its board of directors who are guilty in making these decisions that made Felda Group incurred such massive losses should be held responsible for their negligence in carrying out their duties.
Under the Felda Act, all the investments of Felda Group, in principle requires the approval of the Minister who is responsible for Felda, which since 1997 has been Dato' Seri Najib Tun Razak.
Whether the investment losses have been revealed to Najib or not revealed to Najib by the management of Felda Global Ventures, the responsibility of the losses must be borne by Felda Global Ventures and Najib. An investigation must be ordered into the matter and the results of the investigation revealed to the Malaysian citizens.
It is understood that Ethos Consulting, a firm where one of its partners Mustapha Omar Ong is a former special officer attached to Prime Minister Najib has been appointed as a consultant for Felda Global Ventures. We demand to know what is the consultant fee that is paid to Ethos Consulting by Felda Global Ventures and how is it that a consultant firm that has no expertise in the agriculture industry has been appointed as consultant for Felda Global Ventures?
If it is true that the overseas investments of Felda Global Ventures have incurred losses, then consultant fee payments should not be made to Ethos Consulting as it is obvious that it has failed to give sound advice. The Malaysian citizens demand answers to all the above questions because Felda has borrowed RM6 billion from us. - Translation by Selena Tay, Malaysia Chronicle
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