This included income from rental agreements totalling RM170,474 and income related to rental offer letters amounting to RM12.67 million.

“The audit has found that as of Dec 31, 2022, RAC has not collected rental income from 12 tenants with a total value of RM170,474 for the duration of their signed agreements,” the report released today said.

“The review also found that 54 rental offer letters were returned by tenants, but the lease agreements were not prepared. Based on the 54 letters returned, RAC did not collect rental income totalling RM12.67 million as of Dec 31, 2022.”

From 2021 to 2022, it said, RAC obtained rental income totalling RM69.80 million.

However, the audit noted possible weaknesses in the recording, monitoring and enforcement of rental income collection.

“There is a possibility of RAC losing revenue amounting to RM24.45 million,” it said.

The audit also found an offer letter from RAC stating that as of Jan 1, 2012, all rental payments related to the railway land belonging to Keretapi Tanah Melayu Bhd (KTMB) would be under its management.

The letter reportedly stated that KTMB’s subsidiary company, 174274-D, would operate on eight RAC land lots to carry out logistics and delivery services.

However, 174274-D did not send RAC an acceptance letter for the offer letter, resulting in RM11.61 million worth of rental income not being imposed on the KTMB subsidiary company from 2012 to 2022.

The audit recommended that RAC follow up with the 54 tenants who returned their rental offer letters.

It also suggested RAC enforce the terms in the rental agreements against the 12 tenants, which included 10 private limited companies with arrears.

“RAC should ensure the rental issue between RAC, 174274-D and KTMB is negotiated and resolved immediately in accordance with the provisions of Act 463,” it said.

The audit was conducted from September to November 2022. Feedback from RAC was received on Dec 9, 2022 and May 30, 2023.