This comes after the Public Accounts Committee recommended that Felcra build up its capabilities before “venturing into fields other than its core business”.
Zahid, who is also the rural and regional development minister, said a committee has been formed to study the PAC’s recommendations to resolve the issue.
“I would like to thank the auditor-general and the PAC for highlighting this issue, and as the minister in charge, I must resolve this problem and find a way to address the irregularities,” he told reporters after opening the Kuala Kangsar Umno meeting at Dewan Jubli Perak today, reported Bernama.
Zahid said he had looked into the matter and conducted discussions with Felcra’s chief executive officer and representatives of the subsidiaries on the debt issue.
The discussions included finding any agency or company interested in buying a commercial development project on Jalan Semarak, Kuala Lumpur.
“Thus far, the building has not been sold, but as the minister currently responsible for rectifying the accounts and investments in Felcra, I have identified at least three agencies or companies with the potential to purchase the completed building.
“The construction cost of the building is quite high, and we aim to sell it based on demand and market price so that the proceeds can repay Felcra’s debts to the government,” he said.
On June 26, PAC chairman Mas Ermieyati Samsudin noted the losses suffered by Felcra’s subsidiaries in the course of their operations, which the committee had found to be the largest contributor to Felcra’s debt.
She highlighted the RM842.7 million owed by Felcra Properties to Felcra, wherein the government had also loaned Felcra RM544 million for the development of the Semarak20 commercial project in Kuala Lumpur.
Mas Ermieyati said PAC held detailed proceedings on this government loan to Felcra as it was of the view that the GLC did not have the expertise for a commercial project as large as Semarak20.
“Felcra ventured into various fields of business through its subsidiaries, but this did not help generate income, creating instead an increased burden of debt in financing their operations,” she said.
She said PAC’s recommendations for Felcra also included that the company and the rural and regional development ministry keep a tighter rein on the management of Felcra’s subsidiaries, and that the company return to its original focus of rural community development.
Zahid said these recommendations will be debated in the Dewan Rakyat tomorrow.