New forensic audit on Felda deals?
This may include the acquisition of PT Eagle High
PETALING JAYA: The Federal Land Development Authority (Felda) is expected to undertake another round of forensic audit investigations on several dubious investment deals under its previous management, say sources.
A source told StarBiz that newly appointedFeldachairman,TanSriMegatZaharuddin Megat Mohd Nor, has been tasked to spearhead the forensic audit team to investigate all the activities, decisions and actions targeted at the suspicious acquisitions, including PT Eagle High Plantations TBK (EHP).
EHP is a loss-making, public-listed Indonesian planter controlled by billionaire Peter Sondakh of the Rajawali Group.
The EHP acquisition was put under the spotlight when Felda’s 34%-owned Felda Global Ventures Holdings Bhd (now known as FGV Holdings Bhd) announced its plan to purchase EHP back in June 2016.
FGV had proposed to acquire a 30%
interest in EHP for US$632mil cash and a further 7% stake via an issue of 95 million new FGV shares worth US$48mil.
But later on, FGV is said to have backed out of the deal due to its stretched balance sheet and depleting cash reserves. The group had already undertaken numerous multi-billion-ringgit acquisitions prior to the EHP proposal.
However, Felda in April 2017 through its investment arm, FIC Properties Sdn Bhd, acquired a 37% stake in EHP from the Rajawali Group for US$505.4mil.
Another part of the EHP deal that drew major criticism was that Felda was paying too high a premium over the market price of EHP shares, which some quarters claimed was as high as 173%.
Felda, however, defended its EHP acquisition by saying that it was 26% less than what FGV had planned to pay for EHP, one of Indonesia’s largest oil palm plantation companies.
Under the deal for EHP, Felda will be given access to 425,000ha of Indonesian land bank as well as Rajawali’s sugar business.
Meanwhile, the source said that “the new round of forensic audit investigation is in line with Economic Affairs Minister Datuk Seri Mohamed Azmin Ali’s recent call on Felda to undertake an external forensic audit on some of its controversial deals”.
Azmin had said that Felda must meet with the highest standards of governance and best practices. Therefore, there is a need for an external forensic audit to get to the bottom of such controversial deals.
Felda is the country’s most important political cog with as many as 54 parliamentary constituencies dominated by Felda settlers.
In recent years, Felda has increasingly been under the spotlight, owing to its involvement in a number of inexplicable deals.
Back in January this year, Felda had cooperated with an external forensic audit investigation carried out on a suspicious land title transfer of its Jalan Semarak land earmarked for the Kuala Lumpur Vertical City project.
It was reported on Dec 21, 2017 that Felda was at risk of losing its rights to strategic land along Jalan Semarak, estimated to be worth RM270mil, as a result of four allegedly dubious sale and purchase transactions.
The land transfer was believed to have occurred when Felda’s subsidiary, Felda Investment Corp Sdn Bhd, gave full power of attorney to Synergy Promenade Sdn Bhd, which was appointed as the main developer of the land in June 2014.
It took an extensive external forensic audit, which also involved the Kuala Lumpur Land and Mines Office and the City Hall, for Felda to regain possession of all the 16 lots of land along Jalan Semarak in March this year.