Azmin: Govt to issue white paper on Felda's critical cash flow problem

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KUALA LUMPUR (Aug 9): Minister of Economic Affairs Datuk Seri Mohamed Azmin Ali today said the government has decided to present a "white paper" in Parliament in the next session to expose the real situation of Federal Land Development Authority (Felda), which is currently facing a critical cash flow problem.

"We (the new government) will reveal this (Felda's cash flow problem and strategic recovery plan) in a (formal) white paper that will be presented and debated in the next session (in the Parliament).

"Felda is facing a critical cash flow problem. The immediate focus of the new board and Felda management is to revitalise Felda's cash flow position with creditors to restructure Felda's loans which have reached a total of RM8.025 billion," he said during the ministers' question and answer session at the Dewan Rakyat today.

Additionally, Mohamed Azmin said the next step taken to strengthen the cash flow position of Felda is through the sale of non-strategic assets, such as properties overseas and within the country.

"Felda's critical financial position today is the legacy of the weakest leadership in corporate governance and irresponsible financial management by the previous management," he added.

Mohamed Azmin's answer was in reply to Kalabakan MP Ma'mun Sulaiman, who required the ministry to state the latest restructuring process of Felda, which purportedly underwent financial and governance crisis.

"The new government is committed to restoring Felda's financial position as soon as possible for Felda settlers in line with the land Development Act (1956) goals," he said.

Mohamed Azmin said Felda has transferred about 400,000 hectares of oil palm land to FGV Holdings Sdn Bhd, for exploration and listing purpose in 2012.

"We will include this matter (transfer of land) in the white paper and relook into the matter. We will take the FGV management's view into our consideration," he said.

Ma'mun had claimed that only 9,000 hectares of oil palm land out of 400,000 hectares was given to Felda settlers.

At the same time, the ministry has assured that the Felda settlers' household loan and advance revenue will be paid on schedule.

"The government is confident that the new board and Felda management will hold on to high accountability and governance principles to ensure Felda's recovery process and sustainable development of Felda," said Mohamed Azmin.

Ma'mun also wanted to know whether Tawau Oil Product Factory, a subsidiary of Felda Vegetable Oil Products Sdn Bhd, was still operating.

To that, Mohamed Azmin said both Tawau Oil and Felda Vegetable were not under Felda's management.

However, FGV Holdings Bhd is in the process of rationalisation to enhance the company's value and performance.

"FGV Holdings does not intend to close the Tawau Oil refinery operations," he added.