KUALA LUMPUR: A 2017 valuation of Merdeka Palace Hotel and Suites in Kuching, bought by Felda Investment Corporation Sdn Bhd (FIC) at RM160mil three years earlier, found that the property was worth just half the price that the Felda investment arm had paid for, the High Court heard.
C H Williams Talhar Wong and Yeo Sdn Bhd, appointed by FIC board of directors in 2017 to revaluate the property, put its then-current value at just RM80mil, according to FIC chief financial officer Azlan Mohamed Ismail.
The 51-year-old told the court that the reassessment was done following a report saying that the hotel was bought by FIC at an inflated price in 2014.The fourth witness at the trial of former Felda chairman and FIC director Tan Sri Isa Samad for criminal breach of trust and graft said a tender exercise was later called for the sale of the hotel, and conducted by Saville Malaysia Sdn Bhd in 2018.
“Two offers were received – one at RM69mil and the other at RM85mil, ” Azlan read from his statement.
The RM85mil offer, he added, was later rescinded after due diligence was performed while the RM69mil offer was increased to RM77.5mil.
“Based on the reassessment by C H Williams Talhar Wong and Yeo made on the financial year ending Dec 31,2016, and the tender exercise by Saville made on the financial year ending Dec 31,2018, the (then) current value of Merdeka Palace Hotel and Suites was impaired (diturunkan) to RM77.5mil, ” he added.
The court was told that the hotel’s purchase had contributed to FIC’s unrealised losses amounting to RM82.5mil, calculated by comparing the difference of the purchase price at RM160mil and the current value at RM77.5mil.The unrealised losses, said Azlan, were recorded in FIC’s financial statement for the year ending Dec 31,2016, and the year ending Dec 31,2018.The court later heard that the reassessment in 2017 was carried out after Tan Sri Shahrir Abdul Samad was appointed Felda chairman early that year, replacing Isa.
Earlier, Isa’s counsel Datuk Salehuddin Saidin raised an objection to Azlan reading his statement on the value of the property, arguing that this was irrelevant to the charges that his client was facing.
Salehuddin’s objection was, however, dismissed by High Court judge Justice Mohd Nazlan Mohd Ghazali.
On Dec 14,2018, Isa, 70, claimed trial to one count of criminal breach of trust by approving the purchase of the hotel without the approval of the Felda board of directors on April 29,2014.The offence carries a jail term of between two and 20 years, whipping and a possible fine upon conviction.
Isa was also charged with nine counts of dishonestly receiving gratification for himself in cash totalling RM3,090,000 from Gegasan Abadi Properties Sdn Bhd director Ikhwan Zaidel for helping to approve the hotel’s purchase by FIC for RM160mil.
The trial continues today.