AG Report: Felda's fishy venture spawned RM45mil loss

PETALING JAYA: Felda lost more than RM45mil in a fish farming venture in one of its subsidiaries, the Auditor-General revealed.

The 2015 Auditor General Report (Series 2) also said Felda lost another RM28mil in four subsidiary and sub-subsidiary companies that were set up without the approval of the Finance Minister.

The companies had been set up to implement the Sturgeon Farming Project, Savaro restaurants and the Schneeballen Pastries Project.

The report said Felda Caviartive Sdn Bhd (FCSB) spent RM47.61mil on the fish farming project, but the returns, including from sturgeon farming and technology transfer, were not realised due to suspension of the project.

FCSB signed a US$45mil (RM146.25mil) contract with two companies - I2C Hassed Co Ltd and I2C Hassed (M) Sdn Bhd - which exceeded the RM110mil limit approved by the Felda board.

"The terms of the technology transfer service agreement and the design build contract agreement signed between FCSB and the appointed company did not safeguard the interests of FCSB," said the Auditor-General.

Global Settlers Sdn Bhd (GSSB) spent RM8.4mil to open five Savaro restaurants but all of them closed shop after two to three years.

As for Schneeballen Pastry, GSSB made progress payments amounting to RM2.29mil to an unrelated company.

"The payments were also made without sufficient supporting documents and the unrelated company's involvement was not specified in the contract," said the Auditor-General.

He added that the Schneeballen Pastry Project was terminated in October last year and RM6.39mil was paid for contracts and pastry machines.