Isa ‘received RM3mil from hotel sale’

KUALA LUMPUR: Tan Sri Isa Samad’s (pic) criminal breach of trust (CBT) and corruption trial opened with the prosecution saying that it will prove that the former Felda chairman had abused his position in the purchase of a hotel in Kuching at an inflated price, and received gratification of over RM3mil for the deal.

Deputy Public Prosecutor Afzainizam Abdul Aziz, in his opening statement, said Isa – in his capacity as director of Felda Investment Corporation Sdn Bhd (FIC) and chairman of its board of directors – had played an active role in the hotel’s purchase by the Felda subsidiary from Gegasan Abadi Properties Sdn Bhd at an inflated price of RM160mil.

The prosecution, said DPP Afzainizam, will show that FIC’s board of directors had on Feb 26, 2014, decided not to proceed with the plan to purchase the hotel at the price of RM137,640,965.89, citing the reasons that it was not a viable business plan.

Isa, sometime in 2013, ordered FIC chief executive officer Mohd Zaid Abdul Jalil to study the proposal to purchase the hotel from Gegasan Abadi Properties, the court heard. 

About two weeks after the meeting, Isa had asked Zaid to again table a proposal on the purchase of the hotel at another board of directors’ meeting, the court heard.

“The prosecution will show that the accused had received a letter from Gegasan Abadi Properties on March 28, 2014, offering to sell the hotel to FIC at RM165mil.

“On April 22, 2014, Gegasan Abadi Properties sent a second letter offering to bring down the price to RM160mil,” DPP Afzainizam said.

The court heard that Zaid had also informed Isa that a new valuation had been made on the hotel, at RM153mil.

“Zaid suggested to the accused that FIC ask for a discount of RM10mil from Gegasan Abadi Properties,” he said.

While seeming to agree with Zaid’s suggestion, on April 29, 2014, Isa, however, told Zaid that the offer price would stay at RM160mil, and approved the proposal to purchase the hotel for this amount.

Although he was informed that the proposal to purchase the hotel at RM160mil would need the approval of Felda, Isa, however, told Zaid that Felda’s nod was not required, the court heard.

“The prosecution will establish that the sale and purchase agreement of Merdeka Palace Hotel and Suites dated June 27, 2014, and the payments made by FIC under the agreement were made against the mandate by Felda’s board of directors – that is FIC’s board of directors can only make a decision (without Felda’s approval) for investments of RM100mil and below,” DPP Afzainizam added.

The prosecution, he noted, will also show that Isa received gratification of RM3,090,000 after the sale went through – in nine instalments of RM100,000, RM140,000, RM300,000, RM250,000, RM500,000, RM500,000, RM300,000, RM500,000, and RM500,000 – from an agent appointed by Gegasan Abadi Properties director Ikhwan Zaidel, JV Evolution Sdn Bhd.

Yesterday, former Felda legal and secretarial division head Siti Salwani Mohamed Salleh, 41, during examination, agreed that the hotel’s purchase by FIC did not receive the required approval of the Felda board of directors.

She, however, said the purchase was still valid as there was a sale and purchase agreement between FIC and Gegasan Abadi Properties.

Under cross-examination by Isa’s counsel Datuk Salehuddin Saidin, Siti Salwani also revealed that a standard operating procedure (SOP) for preparations of paperwork to get approval from Felda for its subsidiaries was only introduced in 2017, following the issue arising from the hotel purchase.

When suggested by Salehuddin that FIC’s board of directors would not have known how to go about getting approval for the purchase of the hotel with the SOP, the witness answered in the affirmative.

On Dec 14, 2018, Isa, 70, claimed trial to one count of CBT 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.

The trial before High Court judge Justice Mohd Nazlan Mohd Ghazali continues today. - Star