In the report, the auditor-general said Felda also owed RM8.66 billion to external institutions as of 2022, a slight decrease from the RM8.8 billion owed the year before.
It advised Felda to chart a clear direction towards operating without further financial assistance from Putrajaya.
It said Felda had been “highly dependent on financial assistance from the federal government”, receiving RM200 million in grants in 2022 compared to RM342 million in 2021.
“The reduction in grants received by Felda affected its operational sustainability.”
The report also advised Felda to closely monitor its subsidiary companies to make sure they can sustain themselves without depending on the parent agency and return profits to Felda.
According to the report, Felda has loans at the group level, including a tawarruq financing facility agreement with GovCo Holdings Bhd amounting to RM2.5 billion.
“FIC Properties Sdn Bhd failed to repay the loan, causing Felda to enter into a new agreement with GovCo as a corporate guarantor for the tawarruq financing facility agreement,” it said.
Issues with PR1MA and LTAT
The report also said PR1MA Malaysia had a loss of RM257 million in 2022 and is struggling to repay a RM1.75 billion Islamic medium-term note loan due in October 2024, with only RM428 million in cash by the end of 2022.
It recommended that PR1MA ensure cash projections from the sale of units fund operational activities and repay sukuk tranche 2.
Meanwhile, the report said the Armed Forces Fund Board (LTAT) had not provided impairments for investments in 13 subsidiaries, including Boustead Holdings Bhd (BHB) and Pharmaniaga Bhd.
“This resulted in net profit for the year and investment in subsidiaries being overstated by RM0.812 billion,” it said, referring to BHB and Pharmaniaga.
LTAT has also had a negative reserve balance since 2020, and unrealised losses of RM0.662 billion from 41 old share portfolios.
The auditor-general advised LTAT to restructure its investment strategies, improve governance in investment management, and ensure that dividend declarations are based on realised gains to maintain payout ability to eligible contributors.
The report also noted that four federal agencies have yet to submit their financial statements for 2022.
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