Felda board gave tacit approval for FIC’s RM160 million hotel purchase, says ex-DG

Former Felda chairman Isa Samad arrives at the High Court in Kuala Lumpur for his corruption and criminal breach of trust trial.

KUALA LUMPUR: The High Court here today heard that the Felda board had in early December 2014 tacitly agreed to the purchase of a hotel in Kuching for RM160 million by its subsidiary Felda Investment Corporation Sdn Bhd (FIC).

Former Felda director-general Hanapi Suhada said none of the board members had objected to the purchase which exceeded the RM100 million mandate set on June 26, 2013.

“(Former Felda chairman) Isa Samad who chaired the meeting did not influence the other board members about the purchase,” he added when cross-examined by lawyer Salehuddin Saidin.

Hanapi said he attended the Dec 1, 2014 meeting on the board’s invitation while he was Felda deputy director-general.

He agreed on the implied consent when Salehuddin brought up recordings of the board meetings.

Salehuddin said minutes of the meetings revealed that FIC signed a sale and purchase agreement with Gegasan Abadi Properties Sdn Bhd and that the 10% deposit to acquire Merdeka Palace Hotel & Suites was made in June 2014.

He said the minutes also showed that FIC had to make a further progress payment of RM97 million to the property owner.

Hanapi agreed that consent to the hotel purchase could have been implied since none of the board members objected.

He also said there was no standard official procedure at the time requiring the presentation of a working paper to rescind the earlier mandate limiting FIC investments to RM100 million or less.

He agreed with Salehuddin that the FIC board could not be faulted if there was misrepresentation by third parties on the hotel valuation of RM153 million in April 2014.

The prosecution is contending that FIC suffered wrongful loss as RM160 million was paid for the hotel.

Hanapi was made a board member of FIC following his appointment as director-general in April 2015. He remained on the board until June 6, 2017.

When examined by deputy public prosecutor Afzainizam Abdul Aziz, Hanapi said he did not know why FIC did not go to the Felda board to get approval for the hotel purchase.

FIC was incorporated on July 2, 2013 as Felda’s main investment arm. Isa was its first board chairman and remained so until 2017.

Hanapi said Isa had ordered him in May 2015 to expedite the payment of RM100 million to FIC for the progress payment to Gegasan Abadi Properties, failing which problems could arise.

“He also instructed me to prepare a working paper for the Felda board to ratify the payment although no prior approval was obtained on the property purchase,” he said.

Isa is charged with one count of criminal breach of trust (CBT) and nine others for receiving over RM3 million in gratification in approving the purchase of Merdeka Palace Hotel & Suites for FIC.

He is accused of committing the offences at Menara Felda in Kuala Lumpur between April 29, 2014 and Dec 11, 2015.

The CBT charge provides imprisonment of up to 20 years, whipping and a fine upon conviction, while the corruption charges allow a jail term of up to 20 years and a fine of at least five times the bribe amount.

The hearing continues before trial judge Mohd Nazlan Mohd Ghazali. - FMT