Ex-Felda secretary confirms purchase of hotel made without mandate

Former Felda board secretary Erwan Aman today confirmed to the High Court that the purchase of the RM160 million Merdeka Palace Hotel & Suites (MPHS) in Kuching, Sarawak, did not obtain a mandate from the board.

During the criminal trial of former Felda chairperson Mohd Isa Samad, Erwan testified the tabling of the Felda Investment Corporation (FIC) progress report did not constitute an application for the Felda board of directors’ approval for the purchase.

“This was just a progress report on investments made by FIC. There was no application to ratify the (hotel) investment approval by the FIC board during the Felda board meeting,” the witness said at the Kuala Lumpur High Court today.

Erwan, 42, who served as Felda secretary from October 2012 to January 2016, was the 19th prosecution witness in Isa’s graft case.

Isa is on trial for alleged criminal breach of trust and receiving bribes of more than RM3 million involving FIC.

In his written witness statement, Erwan said during the Dec 1, 2014, meeting, former FIC CEO Mohd Zaid Abdul Jalil tabled the company’s progress report on FIC investments.

“By right, any investment worth over RM100 million by FIC should be tabled by presenting an investment approval application proposal to be approved by Felda board, in line with the Felda board decision in the minutes of the July 25, 2013, board meeting,” he explained.

The witness’ statement contradicts an earlier claim by the accused’s lawyer Salehuddin Saidin, who during the cross-examination of Mohd Zaid, asserted that FIC did not have a specific mechanism for applications for approval by the board concerning such investments.

Mohd Zaid (photo), as the 15th witness, had told the court that the purchase of MPHS from Gegasan Abadi Properties Sdn Bhd in 2014 did not obtain Felda's mandate which stipulates investments over RM100 million must be brought to the board for approval.

Witness in no position to advise on approval

Meanwhile, Erwan today further claimed the board paper on the RM100 million advance payment to FIC for Hotel Merdeka Palace Hotel purchase project and proposals for repayment of advance’ was not for the purpose of obtaining approval.

During the trial, which entered its 13th day today, Salehuddin claimed Erwan was not in a position to tell the court that FIC needed to obtain Felda approval on investments exceeding RM100 million.

The defence counsel claimed that the witness’ role was merely to manage, arrange and conduct Felda's board meetings.

As such, the court heard that the witness was, at the time, in no position to determine if FIC had failed to obtain Felda approval in the hotel deal.

Salehuddin: Your role as secretary was just to take note (of issues to be discussed in) meetings?

Erwan: Yes.

Salehuddin: Why didn’t you mention (that the Felda BOD must give approval to FIC in the hotel deal)?

Erwan: It was not my job.

Salehuddin: So, you were in no position to give your view that FIC needed to obtain Felda approval or not?

Erwan: Agree.

Salehuddin: You only know a small part of the information (on the hotel purchase) that was in the minutes.

Erwan: Agree.

Even so, Erwan explained that the minutes distributed to all board members mentioned the condition concerning approval for RM100 million investments.

When asked on where were the minutes, Erwan responded that he needed to check.

The trial was presided over by Judge Mohd Nazlan Mohd Ghazali who sent Jan 13 and 14, 2020 as the next trial dates. This was after the prosecution informed the court that three witnesses remain to be called. - Mkini