FELCRA Bhd’s 14 subsidiaries have racked up a total debt of RM1.21 billion, the Public Accounts Committee (PAC) revealed today.
In a press conference in parliament, PAC chairman Datuk Mas Ermieyati Samsudin noted that losses suffered by Felcra’s subsidiaries in the course of their operations were found to be the largest contributor to Felcra’s debt.
Of the total debt of RM1.21 billion as of April 2023, Felcra’s estate joint ventures accounted for RM309.8 million, while Felcra Properties had total debt of RM842.7 million.
The company is wholly owned by Minister of Finance Inc (MOF Inc) and supervised by the Rural and Regional Development Ministry.
“This situation led the government to provide a loan of RM544 million to Felcra for the commercial development in Jalan Semarak, Kuala Lumpur dubbed Semarak20,” she said.
PAC’s recommendation for Felcra was for the company and the Rural and Regional Development Ministry to keep a tighter rein on the management of Felcra’s subsidiaries.
“The PAC also recommended that the company return to its original focus of rural community development,” added Mas Ermieyati.
For the Semarak20 project, the PAC said the Rural and Regional Development Ministry must ensure a comprehensive strategy for Felcra to ensure success, enabling debt repayment to the government and strengthening the company’s financial position.
A total of 15 witnesses were called during the nine PAC proceedings from June 27, 2023 to February 29, 2024.
These include witnesses from the National Audit Department, Finance Ministry (MOF), Rural and Regional Development Ministry, Felcra, and WZR Group, the contractor appointed to develop Semarak20.
The proceedings were initiated after the Auditor-General’s Report 2021 Series 2 highlighted Felcra’s debt arrears, which amounted to RM312.22 million as of December 31, 2021.
This is an increase from RM82 million in the preceding year.
The auditor-general’s department also found that Felcra owed the government RM3.67 billion as of December 31, 2021.
“The PAC will give two months to MOF Inc, the MOF, the ministry and Felcra to present their actions regarding the PAC’s recommendations,” added Mas Ermieyati. – June 26, 2024.
