PETALING JAYA: The Pakatan Harapan government should admit that Felda is suffering losses because the price of palm oil has dipped below production costs, says Datuk Seri Najib Razak
“Just admit that the main reason Felda is suffering losses now is because the price of palm oil fell below production costs post GE14,” he said in a Facebook post on Tuesday (April 9).
He said this in response to a police report lodged by Felda director-general Othman Omar on Monday (April 8) claiming that the former premier cheated the agency into investing US$505mil (RM2.07bil) in Eagle High Plantations TBK (EHP).
Othman had alleged that the purchase price was 344% higher than its actual value of US$114mil.
Othman said in the police report that Felda took a RM4.8bil loan from GovCo Holdings Bhd (GovCo), a subsidiary of the Finance Ministry then headed by Najib to finance the deal.
He described the deal endorsed by then Felda chairman Tan Sri Isa Samad, as “one-sided and risky” because EHP had debts amounting to US$547.4mil in 2014 with liabilities recorded at US$676.9mil in 2016.
In response, the former prime minister said the government should reveal the “put option” included in the agreement with EHP that secured the interest of Felda, instead of attacking him.
He added that the “put option” in the agreement would negate any unwarranted claim that Felda was suffering losses after buying stakes in EHP.
Najib said this would allow Felda to sell back its 37% stake to EHP at the original purchase price on top of a 6% annual interest charge borne by EHP.
He added that the government would still profit if it sold back the shares because the interest subjected to EHP was higher than the 3.85% interest on the loan taken to buy over the stakes.
“In other words, we could get back the amount invested with additional 6% annual interest if we opted to pull out,” he said.
Najib said Felda would enjoy a good return if EHP recorded gains with increasing palm oil price.
“At the end of the day, he said, public funds would still be ensured, and the government would not suffer any loss,” Najib said.