RM6.5 bil EPF loan to Felda a 'win-win' situation
S PathmawathyPublished: Jul 1, 2011 10:18 AM | Updated: Jul 1, 2011 7:09 PM
Deputy Minister in the Prime Minister's Department Ahmad Maslan has urged detractors to stop politicising the RM6.5 billion loan taken by Federal Land Development Authority (Felda) from the Employees Provident Fund (EPF).
Deputy Minister Ahmad Maslan says Felda is in sound financial shape and can repay its loans on time.
Deputy Minister in the Prime Minister's Department Ahmad Maslan has urged detractors to stop politicising the RM6.5 billion loan taken by Federal Land Development Authority (Felda) from the Employees Provident Fund (EPF).
Ahmad insisted that Felda keeps a clean loan repayments record and has the capacity to settle its borrowings on time.
According to Ahmad, EPF had written to the ministry and expressed its confidence in Felda's investments as it is low risk and has the capability to generate high-dividends to EPF contributors.
"So it is a win-win strategy," he said during a press conference at the Parliament lobby yesterday, adding that when Felda borrowed RM4.9 billion from the World Bank, Asian Development Bank and other investment funds from the Middle East in the early 1980s, it had settled payments 14 years ahead of schedule back in 2000.
"We have used RM3.5 billion (of the EPF loan), whether we are going to utilise the remaining RM3 billion, we haven't decided yet," said Ahmad.
He explained that Felda spent RM2 billion on replanting and another RM1.5 billion to buy a sugar factory in a move to diversify its business.
Anak, a pro-Felda settlers group, had demanded on Tuesday that the government explain the RM6.5 billion loan from EPF to Felda, how and where such funds are being used, why Felda - which is touted to be self-sufficient and cash rich - needs a loan and whether it is to cover losses which have been kept hidden.
Isa rubbishes Anak concerns
Felda chairman Isa Samad, however, has rubbished such concerns, saying that it is standard practice for a business entity to use outside funds to finance new business ventures.
Isa had also claimed that the fact that the EPF agreed to the loan is proof positive of the federal body's business acumen.
"We are not even close to becoming bankrupt. Felda's assets are valued at RM19.2 billion and the assets are not according to recent prices, it is at cost rate and we don't have the need to do an evaluation now but if we do, that it is definitely four or five times its initial value," said Ahmad.
He added that Felda racked in a net profit of RM1.2 billion last year and, judging by the escalating price of palm oil, a similar profit is expected this year.
Ahmad insisted that Felda keeps a clean loan repayments record and has the capacity to settle its borrowings on time.
According to Ahmad, EPF had written to the ministry and expressed its confidence in Felda's investments as it is low risk and has the capability to generate high-dividends to EPF contributors.
"So it is a win-win strategy," he said during a press conference at the Parliament lobby yesterday, adding that when Felda borrowed RM4.9 billion from the World Bank, Asian Development Bank and other investment funds from the Middle East in the early 1980s, it had settled payments 14 years ahead of schedule back in 2000.
"We have used RM3.5 billion (of the EPF loan), whether we are going to utilise the remaining RM3 billion, we haven't decided yet," said Ahmad.
He explained that Felda spent RM2 billion on replanting and another RM1.5 billion to buy a sugar factory in a move to diversify its business.
Anak, a pro-Felda settlers group, had demanded on Tuesday that the government explain the RM6.5 billion loan from EPF to Felda, how and where such funds are being used, why Felda - which is touted to be self-sufficient and cash rich - needs a loan and whether it is to cover losses which have been kept hidden.
Isa rubbishes Anak concerns
Felda chairman Isa Samad, however, has rubbished such concerns, saying that it is standard practice for a business entity to use outside funds to finance new business ventures.
Isa had also claimed that the fact that the EPF agreed to the loan is proof positive of the federal body's business acumen."We are not even close to becoming bankrupt. Felda's assets are valued at RM19.2 billion and the assets are not according to recent prices, it is at cost rate and we don't have the need to do an evaluation now but if we do, that it is definitely four or five times its initial value," said Ahmad.
He added that Felda racked in a net profit of RM1.2 billion last year and, judging by the escalating price of palm oil, a similar profit is expected this year.
View Comments0