Friday 29 Mar 2024
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(July 3): Agriculture and Agro-based Industries Minister Datuk Seri Ismail Sabri Yaakob must explain if Putrajaya was complicit in approving the huge funds from rice firm Bernas to companies owned by tycoon Tan Sri Syed Mokhtar Al Bukhary  as revealed in the RAM Rating Services report earlier this month, PKR said today.

Its Alor Setar MP, Gooi Hsiao Leung, said the downgrading of Bernas' credit rating was particularly worrying as it put the company’s financial viability into question and would impact its ability to raise new funds for its operations in the future.

He added that not only was Bernas reported to have made huge advances to Syed Mokhtar’s companies, it was also said to have approved dividend payouts much higher than its net earnings to its shareholders, now fully owned by Syed Mohktar’s companies.

Gooi questioned if Tradewinds  (M) Bhd owned by Syed Mokhtar was facing financial difficulties that it had to resort to raiding Bernas funds.

He added that for some time now, questions had been raised whether the high debt levels of Syed Mokhtar’s group of companies posed a systemic risk to the country’s banking system.

In 2013, three of Syed Mokhtar’s companies, MMC, Tradewinds Corp and Tradewinds (M) combined, had more than RM28 billion in debts, said Gooi.

"Since taking Bernas out of public scrutiny with its delisting from Bursa Malaysia a year ago, the public has been kept in the dark about its financial operations and performance, until the recent shocking revelations made by the credit rating report that Bernas is channelling huge funds to its parent companies owned by Syed Mokhtar totalling over RM700million," Gooi said in a statement today.

Gooi also urged the minister to disclose which government agencies were holders of Bernas's RM750 million Islamic notes which have been downgraded to A3/negative/P2 from AA3/negative/P1 in the credit rating report, adding that this made it extremely difficult for the note holders to sell their bonds and recover their investment.

He added that Bernas was not a private company for its shareholders to do as they wished.

"It derives its profits from huge government subsidies, tax exemptions and the monopoly rights to import rice.

"It is a strategic national asset tasked with maintaining food security, managing the country’s rice stockpile and government subsidies, protecting the national interests of rice farmers, millers and the consumers," he added.

Gooi also said the corporate governance of the rice firm since its delisting showed that the government had lost control of Bernas.

"The minister must immediately answer these questions before Bernas is stripped to its bones, triggering yet another government bailout of the losses suffered by it and government agencies holding the Islamic notes in Bernas," he added.

Bernas was de-listed with the government's support in 2014 with the promise that it would be re-listed after a restructuring exercise.

Despite Ismail's claims that Syed Mokhtar had privately made the undertaking to re-list the company, Bernas has not officially confirmed any re-listing plans to Bursa Malaysia. – The Malaysian Insider

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