KUALA LUMPUR: Felda, a Malaysian state agency overseeing farmers, will ask for about 6 billion ringgit ($1.5 billion) from the government to help turn itself around, according to a person familiar with the matter.
The agency will include the request in its long-awaited white paper when it is tabled in parliament on Wednesday, said the person, who asked not to be named as the bill hasn’t been publicly presented. If approved, the funds would likely be disbursed in stages, the person said.
Prime Minister Tun Dr Mahathir Mohamad’s administration has had to step in to rescue struggling state institutions as its fight against corruption exposes pockets of financial trouble.
In December, the government approved a 19.9 billion ringgit aid for the Lembaga Tabung Haji.
Extending financial aid to Felda may further weigh on Mahathir’s efforts to narrow the budget deficit, which reached a five-year high in 2018.
A representative from Felda declined to comment on the rescue, while confirming that the white paper will be tabled on Wednesday.
Representatives from the finance and economy ministries didn’t immediately comment.
The Federal Land Development Authority, as its full name goes, plans to sell off some assets to help fix its finances as it grapples with an ongoing corruption investigation.
Minister of Economic Affairs Azmin Ali said in October that Felda is looking to cut its debt to 6.8 billion ringgit by end-2018. Its cash flow was at a “critical” level, with 8 billion ringgit in debt as of June 2018, he said then.
Felda’s former chairman Isa Samad was charged with bribery linked to a hotel purchase. The government commissioned the white paper in September for Felda to explain the reasons behind its poor financial performance.
Even its publicly-listed plantation arm has sought to distance itself from the agency, changing its name last July to FGV Holdings Bhd., from Felda Global Ventures Holdings Bhd
., to help recover shares that were weighed down by its parent’s financial scandals.- Bloomberg