Changes in Felda

Shahrir pledges to improve its governance and financial performance

KUALA LUMPUR: New Felda chairman Tan Sri Shahrir Samad (pic) has promised a major shakeup at the Federal Land Development Authority (Felda) in a bid to improve the governance and financial performance of the government entity.

In his first press conference since being appointed earlier this month, the seasoned Johor Baru MP outlined several key areas for Felda to work on.

The scope of his task is broad, given Felda’s sprawling portfolio of business interests. A major initiative is the monetisation of existing assets, as evidenced by the recently concluded sale of part of its stake in Malayan Banking Bhd (Maybank).

“The board reached the decision to sell the stake back in November. This is because Felda has to work on other issues such as helping manage the settlers’ estates, replanting exercises, welfare initiatives and others. We are channeling our resources for schemes and programmes that contribute to their betterment,” he told reporters here yesterday.

The shake-up comes as Felda has been in the limelight for wrong reasons in recent times.

Rectifying legacy issues, monetising assets and achieving returns from new ventures are the key responsibilities faced by the Felda chairman.

Aside from several failed business ventures which were uncovered in the 2015 Auditor-General’s report, which caused it to incur millions of ringgit in losses, the agency is also undertaking new strategic ventures that are valued at billions of ringgit.

“Since the injection of all plantation assets into Felda Global Ventures Holdings Bhd (FGV), Felda requires new sources of funding to help settlers and be self-sufficient. We are looking at various assets to dispose of, and for the investors, we have to put emphasis on achieving good returns,” he said.

Felda has a mandate to manage the Next Generation Felda Housing Project involving the construction of 20,000 housing units within five years. The initiative was first announced by Prime Minister Datuk Seri Najib Tun Razak in 2012.

At the same time, it is undertaking a massive international corporate exercise with the proposed purchase of a 37% stake in Indonesia’s PT Eagle High Plantations Tbk (EHP) in an RM2.26bil deal.

However, Shahrir swiftly denied suggestions that the Maybank stake sale and further possible monetisation exercises were linked to the EHP deal.

“The EHP acquisition will not come from Felda’s funds. It will be funded by the Government. We did better than FGV, as we got a discount from the original price. I think the terms of the acquisition are good. The decision has to go through the regional authorities so we cannot announce the details yet. I assure you the deal has safeguards built in which will protect our investment,” he said.

He added that Felda was looking into selling off London hotels owned by its unit Felda Investment Corp Sdn Bhd (FIC).

“I think the returns of the hotels in London do not justify us holding on to them. But their value has certainly appreciated, so the best way to benefit is to sell the assets,” he said.

According to Shahrir, another pressing concern is the restructuring of FIC, which currently has a vacuum at its management level.

FIC, which undertakes non-plantation-related ventures and holds a substantial portfolio of property and share investments, does not have a chairman or chief executive officer. He also confirmed that the Malaysian Anti-Corruption Commission is investigating previous transactions made by FIC based on the findings of the 2015 AuditorGeneral’s report.

“We have asked all board members of FIC to resign. A new board will be appointed in due course. It was clear from the report that there was a lack of governance there. We have no choice but to reorganise it,” he said.

According to FIC’s website, its current board is comprised of Felda’s current director-general Datuk Hanapi Suhada, Datuk Nik Azman Mohd Zain, Datuk Noor Ehsanuddin Mohd Harun, and Datuk Dr Omar Salim.