FIC’s hotel purchase was way above market price, says witness

KUALA LUMPUR: The High Court in the corruption trial of former Felda chairman Isa Samad was told today that a hotel in Kuching was purchased at about 50% above market price.

Azlan Mohamed Ismail, the acting chief financial officer at Felda Investment Corporation Sdn Bhd (FIC), said this was based on a revaluation done on the Merdeka Palace Hotel & Suites hotel in 2017.

He said the new Felda board, chaired by Shahril Abdul Samad, had called for the revaluation following claims that it was purchased at an inflated price.

Isa, who was replaced by Shahril, was both chairman and director of Felda and its subsidiary FIC.

FIC purchased the hotel in 2014 for RM160 million, reportedly without mandate from its parent body.

“A revaluation by CH Williams Talhar Wong & Yeo Sdn Bhd for the financial year 2016 revealed that the hotel was valued at about RM80 million,” he said when examined by deputy public prosecutor Afzainizam Abdul Aziz.

Azlan, the fourth prosecution witness, said a tender exercise by Saville (M) Sdn Bhd last year showed the hotel was valued at RM77.5 million.

“It could be concluded that the purchase caused an unrealised loss of RM82.5 million to Felda and FIC,” he said.

Earlier, Isa’s lawyer Salehuddin Saidin objected to the revaluation report in Azlan’s witness statement, saying his client is facing criminal charges as a result of not obtaining approval from Felda.

“The evidence of valuation had no relevance to the charges and that portion of the evidence must be expunged,” he added.

However, Afzainizam said this was to show that the property was purchased at above the market price.

Trial judge Mohd Nazlan Mohd Ghazali ruled that the revaluation report could remain in Azlan’s witness statement to show that the accused dishonestly caused wrongful loss to FIC.

Isa is facing one count of criminal breach of trust and nine for receiving over RM3 million in gratification in approving the proposal for the purchase of the hotel for FIC.

He was accused of committing the offence at Menara Felda, Platinum Park, No. 11, Persiaran KLCC, between April 29, 2014 and Dec 11, 2015.

When questioned by Afzainizam, Azlan said the hotel was still in operation and had not been sold.

The hearing continues. - FMT