Malaysia: Felda chief says it has recovered from troubles

• Malaysia’s Federal Land Development Authority (Felda) has recovered from its woes, according to its chairman Shahrir Samad after helming it for a year, saying he has seen the return of confidence of both settlers and the marketplace.
• Felda is working hard to move past a series of scandals that has shocked the nation and might shake the loyalty of the government agency’s Malay farmers and their families, who form a huge vote bank for the ruling coalition in rural Malaysia.
• Tan Sri Shahrir, a former Cabinet minister, was appointed in Jan 17 to replace fellow Umno veteran Isa Samad, whose time at the agency began to unravel in the last two of his six years in charge as a series of scandals came to light.
• By the time Mr Shahrir, the MP for Johor Baru, took over, Felda had a whopping MYR12bn in liabilities, even though the agency had raised half of that amount in a 2012 public listing of its crude palm oil production business under Felda Global Ventures (FGV).
• In addition, the 112,635 poor Malay families who were given government land to plant cash crops from 1956 to 1990 under the Felda scheme owed MYR5bn because of replanting, fertiliser and housing costs. These settlers have been a bedrock of Umno’s grip on rural Malay seats for decades.
• He said the settlers were in the dark about how the agency was run, while morale among staff was low because of incessant investigations. Banks had walked away and only one lender offered MYR300mn, but it had to be backed by a collateral twice the size.
• The sturgeon project in Malaysia was just one of the scandals under Tan Sri Isa, who was remanded for investigations but not charged over any wrongdoing.
• There were also management disputes in FGV, with the shares of the company today worth just a third of their value when it debuted.
• The biggest shock emerged in Jan 18 when it was announced that Felda land lots had been fraudulently transferred to a property developer in 2015. The government confirmed last week that Mr Isa, a former Negeri Sembilan chief minister, had signed off rights to the Kuala Lumpur land worth over MYR1bn.
• But Mr Shahrir, 68, pointed to votes of confidence that came just six months into his tenure after Felda made “hard decisions” to liquidate non-core investments such as hotels in London and shares in non-related firms.
• He pointed out that more importantly, with the opposition trying to make headway into Felda farms, thousands of settlers returned to the fold in 2017 and placed their trust in the agency.
• At the last Settlers’ Day in Jul 17, these oil palm farmers who had decided to operate independently were allowed to reclaim benefits and privileges – such as debt forgiveness, inclusion in housing programmes and a discount on FGV shares – if they sold at least half of their harvests through Felda.
• But he admits that it will take several more years before Felda’s accounts start showing a surplus, although multiple probes and internal efforts to repair the recent damage show the government’s seriousness in transforming the agency.
• Felda in Mar 18 managed to reclaim four plots totalling 6.6ha in KL – which some have valued at over MYR1bn – from a developer that had been allowed to take ownership of them without paying.
• Mr Shahrir also said that Felda was renegotiating the development agreement on those plots, which accords Felda only 10% of proceeds from the planned Kuala Lumpur Vertical City project, or MYR500mn, depending on which amount is higher.
• The government has also stepped in to fund various programmes to upgrade amenities and modernise the 317 farming settlements nationwide, providing these rural areas with broadband Internet, improving physical infrastructure and encouraging new business opportunities, such as ecotourism.

External Link : http://www.straitstimes.com/asia/se-asia/felda-chief-says-it-has-recovered-from-troubles