Hotel bought at RM160mil valued at just RM80mil three years later, says witness at Isa Samad trial

Former Felda chairman and FIC director Tan Sri Isa Samad

KUALA LUMPUR: A 2017 reassessment of Merdeka Palace Hotel and Suites in Kuching, bought by Felda Investment Corporation Sdn Bhd (FIC) at RM160mil in 2014, valued the property at just RM80mil, the High Court heard on Tuesday (Oct 8).

FIC chief financial officer Azlan Mohamed Ismail, 51, told the court that the board of directors of the Felda investment arm had appointed C H Williams Talhar Wong and Yeo Sdn Bhd to revalue the hotel in 2017.

The move followed a report saying that the property was bought by FIC at an inflated price, he said.

Azlan, the fourth witness at the trial of former Felda chairman and FIC director Tan Sri Isa Samad for criminal breach of trust and graft, said a tender exercise was later called for the sale of the hotel, and conducted by Saville Malaysia Sdn Bhd in 2018.

"There were two offers received – one at RM69mil and the other at RM85mil," the witness read from his statement.

Azlan said the RM85mil offer was rescinded after due diligence was performed while the RM69mil offer was increased to RM77.5mil.

"Based on the reassessment by C H Williams Talhar Wong and Yeo made on the financial year ending Dec 31,2016, and based on the tender exercise by Saville made on the financial year ending Dec 31,2018, the (then) current value of Merdeka Palace Hotel and Suites was impaired (diturunkan) to RM77.5mil," he added.

The court was told that the hotel's purchase had contributed to FIC's unrealised losses amounting to RM82.5mil, calculated by comparing the difference of the purchase price at RM160mil and the current value at RM77.5mil.

The court later heard that the reassessment in 2017 was carried out after Tan Sri Shahrir Abdul Samad was appointed Felda chairman early that year, replacing Isa.

Earlier, Isa's counsel Datuk Salehuddin Saidin raised an objection to Azlan reading his statement on the value of the hotel, arguing that this was irrelevant to the charges that his client was facing.

Salehuddin's objection was, however, dismissed by High Court judge Justice Mohd Nazlan Mohd Ghazali.

Deputy Public Prosecutor Afzainizam Abdul Aziz leads the prosecution.

The trial continues before Justice Mohd Nazlan in the afternoon.

On Dec 14,2018, Isa, 70, claimed trial to one count of criminal breach of trust by approving the purchase of the hotel without the approval of the Felda board of directors on April 29,2014.

The offence under Section 409 of the Penal Code carries a jail term of between two and 20 years, whipping and a possible fine upon conviction.

Isa was also charged with nine counts of dishonestly receiving gratification for himself in cash totalling RM3,090,000 from Ikhwan or helping to approve the hotel's purchase by FIC for RM160mil.

The charges were made under Section 16a(A) of the Malaysian Anti-Corruption Commission (MACC) Act 2009, punishable under Section 24(1) of the same law, which provides a jail term of not exceeding 20 years and a fine of at least five times the bribe amount, or RM10,000, whichever is higher, upon conviction. - Star