The Grand Plaza service apartments in Bayswater, London, is now the property of Felda. - October 3, 2013.State plantation giant Felda's £98 million (RM497 million) purchase of a London serviced apartment complex is now being investigated by anti-graft officials and could derail its chairman Tan Sri Isa Samad's chances in the Umno vice-presidential race.
The Malaysian Insider understands there is also growing disquiet in Umno over the hefty price paid by Felda Investment Corp (FIC) UK Properties for the Grand Plaza Service Apartments in London's Bayswater suburb, a popular area among Malaysians living in the UK capital city.
"The price tag is the talk among Umno people because it is very expensive and it isn't something that Felda should venture into," an Umno warlord told The Malaysian Insider.
"There has been enough controversies over the FGVH listing, so we don't need another cause for the opposition to use," he added, referring to the Felda Global Ventures Holdings public listing last year.
It is also learnt that the Malaysian Anti-Corruption Commission (MACC) is looking into the matter to see if there is any element of corruption in the deal that was sealed on September 4.
Sources said the MACC is working with others to investigate the matter.
"This is a sensitive matter as it involves an agency led by an Umno aspirant. It must not be seen as a way to knock Isa off the race," a source told The Malaysian Insider.
Isa is one of three challengers taking on incumbents Home Minister Datuk Seri Ahmad Zahid Hamidi, Rural Development Minister Datuk Seri Shafie Apdal and Defence Minister Datuk Seri Hishammuddin Hussein for the three vice-presidential slots in the Umno election this month.
The popular Isa (pic) was named Felda chairman two years ago and FGVH was listed a year later despite opposition from some settlers who feared they would lose control of their land.
He had defended the purchase after DAP secretary-general Lim Guan Eng last week questioned the amount paid for the Grand Plaza Service Apartments, asking about the benefit it would bring to Malaysia’s one million Felda settlers.
“It’s not an extraordinary issue. Tabung Haji also bought few buildings in London,” the former Negri Sembilan mentri besar had said last month, referring to the Muslim pilgrims board.
“We are buying because we want assets," he added.
Felda and its subsidiary FGVH had previously spent on the RM86 million Grand Borneo Hotel in Kota Kinabalu, RM110 million in smart cards manufacturer and agricultural villages developer Iris Corp and properties in the United Kingdom.
Grand Plaza is one of London's largest serviced apartment buildings, containing 198 apartment units across 13 period stucco fronted buildings over 105,044 square feet.
Located near the Bayswater subway station, it has an average occupancy rate of 90% every month and Isa had said it had ranked number one by Google search and 75% of sales are done online.
But critics said Felda should invest in ventures related to its core business of plantations rather than property or tourism deals.
"There are greater benefits if it went to research and development for palm oil products rather than property deals," said an executive in a government-linked company, noting that Putrajaya had asked GLCs to divest non-core assets and businesses in the past year.
"It is strange to see Felda buying up non-core assets when Khazanah Nasional and Permodalan Nasional both have to divest to facilitate enterpreneurship," he added.
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