A beef with the Opposition

  • Letters
  • Sunday, 20 Nov 2011

Following allegations of wrongdoing and attacks from the Opposition, National Feedlot Corp executive chairman Datuk Seri Dr Mohamad Salleh Ismail has come out in defence of the Beef Valley project.

IT is a hot afternoon at the National Feedlock Corp (NFC) cattle farm in Gemas, and Datuk Seri Dr Mohamad Salleh Ismail can be forgiven for looking hot and bothered.

“I don’t really like press conferences. I am a scientist. I go to the lab and I do my work,” says the NFC executive chairman and former head of Technology Park, his puffy eyes betraying his lack of sleep.

This time around, however, he does not have the luxury of keeping out of the spotlight.

It has been a busy few weeks for him, not only because of the NFC project but also because he and his family have come under a barrage of attacks from the Opposition.

It started after the Auditor-General’s report described NFC as “a mess” and poorly managed for meeting only 41.1% of its target for 2010.

Dr Salleh is the husband of Women, Family and Community Development Minister Datuk Seri Shahrizat Abdul Jalil, who is also Wanita Umno chief. NFC is run by Dr Salleh and their three children Izmir 31, Izran, 27, and Izzana, 25.

Naturally, the Opposition was delighted at having such a juicy target.

The Opposition appeared to have help on their side as they managed to get hold of NFC’s accounts and transactions.

Dr Salleh put it down to two of his top managers – the finance manager and sales manager – resigning from the company under “suspicious circumstances” a few weeks earlier.

PKR’s strategic director Rafizi Ramli led the slew of attacks, questioning the RM250mil government loan to NFC and declaring he had information that the loan was already drawn down. He hit out at NFC, calling it a failure for having suffered a loss of RM7mil in 2008 and another RM11mil the following year.

Then he hurled questions about NFC spending RM827,579 on its directors’ overseas trips and its whopping discount of RM2.9mil for beef bought by Meatworks, their family-owned restaurant.

The most explosive salvo was that NFC had used the government loan meant for its cattle business to buy a RM9.8mil luxury condo at One Menerung in Bangsar. Rafizi called this an “unheard of investment decision” for a cattle company and accused NFC of misappropriating public funds.

It didn’t stop there.

Allegations that NFC had paid RM26,400 for “expenses” to Shahrizat in 2008, donated cattle worth RM5,300 to Works Minister Datuk Shaziman Mansor and given another RM2,600 worth of cattle to Klawang assemblyman Datuk Yunus Rahmat were shot at them.

“I was shocked. My wife was also shocked. We didn’t know how to address it. The business is doing well, sales are expanding and I consider ourselves lucky having succeeded. Then suddenly this 30-something-year-old guy, Rafizi, comes along and attacks us.

“I don’t know him. My wife doesn’t know him. My wife has always been friendly and nice to everyone and she has never hurt anyone so we didn’t know why he was attacking us. We asked our children if they knew Rafizi and none of them did.

“We were checking to see what wrong we might have done for him to try to harm us like that. It’s not like he came to ask for my daughter’s hand in marriage and we turned him down,” Dr Salleh bursts out.

He stresses that his wife Shahrizat is not involved at all with NFC or its operations. Discussing the business at home, he says, is a strict no-no with her.

“If I open my mouth and even try to bring it up, she will tell me to keep quiet. She doesn’t want to hear about it. My wife puts up a big wall between us, where I have my part and she hers (and these remain separate),” he adds.

A little sheepishly, Dr Salleh reveals that when the controversy broke, Shahrizat even went for a day without talking to him!

“After that, it was okay. She was composed. My wife and I and the kids are all very close to each other.”

He confides that it took him a long time to understand that the attacks were “political” and that for some (like Rafizi), “politics is more important than integrity.”

The publicity-shy Dr Salleh shares that Shahrizat did not force him to have the press conference. He felt compelled to address the allegations after seeing the comments from her party members, Deputy Prime Minister Tan Sri Muhyiddin Yassin who had asked NFC to explain and former prime minister Tun Abdullah Ahmad Badawi who said Shahrizat has nothing to do with the company.

On the day of the press conference, Shahrizat had flown off to Makkah for umrah. The family was supposed to go there together but with the allegations pending, they decided to shelve the trip. Dr Salleh says he managed to persuade Shahrizat to go ahead without them.

“I told her this issue has nothing to do with her. I think going there and praying would help strengthen her. I am biased because she is my wife. She is a good woman.”

Flanked by lawyer Datuk Seri Muhammad Shafee Abdullah, NFC corporate and financial consultant Zakaria Mohammed, and his son Wan Shahinur Izmir, who is also NFC director, Dr Salleh fields various questions from reporters for an hour and a half, giving lengthy explanations for each allegation.

He also does not hesitate to provide information on the business.

NFC imports Brahman cows from Australia. These are kept in pens at the Gemas farm where they are fed and fattened to be ready for slaughter in four to six months.

The cows at his farm are valued at over RM4,500 compared with RM2,500 for a local cow, he explains, because Brahman cattle are twice as heavy as those from Kedah and Kelantan.

“The six-month-old cows we have are as big as the four-year-old cows in Kedah and Kelantan. Local cows eat but do not grow fat.

“We (NFC) need cows which are of good stock because we are producing them for meat. Our cows eat and grow fat quickly and can weigh up to 600kg in just a few months,” he adds.

When asked why they have to import their cattle, he says they have to start somewhere.

The long-term plan, he explains, is to work together with Felda and Felcra, which have large tracts of land, to breed these high quality cattle locally.

“We are forced to import the cattle now but we have been in business for only two years. Our contract is for 30 years and is renewable for another 30 years, so I think in 60 years, the success will be there (to breed the high quality cattle locally).”

He feels that it is not accurate to say the NFC had only met 41.1% of its target in 2010 because there is a difference between the number of cows they have and the numbers slaughtered.

Dr Salleh points out that NFC only started the business in 2009, and there were things to take care of before they were able to market the meat.

Its mini abattoir was only ready in April, obtained halal certification in June and got the Veterinary Health Mark (VHM) only in mid-2010, he adds.

It took a while to get the VHM because the Gemas farm is quite far and the department is very strict in issuing the VHM, he explains.

He says the department officers checked the farm twice, first to inspect the facilities, for which they suggested improvements and corrections, and later to make sure the corrections were made.

“Even if there is a temperature difference of 3° (in the abattoir), they will ask us to fix that. If we don’t have the VHM, supermarkets will not buy the meat from us even if they like our beef.

“It was only when we got the VHM in mid-2010 that our sales went up. We had the targeted number of cows in 2010 but we couldn’t slaughter them until we got the VHM. If we can’t sell the meat, why slaughter the cattle?” he says, explaining why NFC fell short of its target of cows that were slaughtered that year.

On its loan and grants, he says the government allocated a grant of RM13mil, of which 50% has been disbursed, and a loan of RM250mil with a 2% interest rate.

He denies that NFC had drawn down the RM250mil government loan, saying there was still RM69mil that hasn’t been released. The money, he says, is allocated in a special loan account and NFC would need to justify to the Finance Ministry the amount it needs before the money is released accordingly.

The agreement for the loan specifies that repayment will only kick in once the RM250mil has been totally disbursed.

Repayment for the principal amount would be RM14.7mil each year for 17 years, he adds.

On the controversial purchase of the One Menerung condominiums, Dr Salleh defends it as a “good business decision”.

The company wanted to develop a feedmill and this would happen only after the contract farmers’ project takes off and succeeds, he says, “So, we thought, while waiting for this, we have to find a place to park the money for the short term, one which would not depreciate and where we could make profits almost yearly.”

NFC bought the two condominiums for RM6.9mil cash per unit. In return, the developer gave them a cash rebate of 10% for two years, which comes up to RM57,000 a month per unit. They rent out each unit for RM18,000, which generates an income of RM75,000 a month per unit or RM900,000 a year for each unit.

“We are getting 12.9% returns on the investment. If we had put the money in the bank, we would get only 2.5% to 3.25% interest, which is less than the inflation rate,” he says, adding that the condominiums were purchased under the company’s name. Once the contract farming started, he says, NFC would sell off the condominiums at a good price because they are in a prime location.

As for the discount NFC gave to its Meatworks restaurant, like every new business that’s just starting out, says Dr Salleh, it had to be priced in a “very favourable way” to attract buyers.

He adds that every one of its 150 buyers, including wet markets and hypermarket operators, received the same amount of discount as Meatworks and that NFC was not giving preferential treatment.

He also denies that NFC paid RM26,400 to Shahrizat for expenses. In fact, she was the one who paid NFC RM25,000 for cattle she bought for qurban (sacrifice and distribution to the poor for Hari Raya Haji), he says.

Dr Salleh nevertheless admits that NFC gave a cow each to Shaziman and Yunus, but it was as part of its Corporate Social Responsibility to donate to the poor in the area.

He also justifies the RM827,579 NFC spent on overseas trips.

As the company was new in the industry, he explains, it had to go to Australia a number of times to look for the cattle and suppliers and establish business links with them.

“2009 was a difficult year for us because we didn’t have the expertise. We had to look for expertise in abattoir and feedlot, and skilled manpower to bring to Malaysia, and that cost money. Australia doesn’t consider Malaysia a big market, so there was a lot of cost of investment in our first year.”

None of them travelled first class on these business trips, he says, adding that Shahrizat did not come along for a single trip.

On NFC’s loss of RM7mil in 2009 and RM11mil in 2010, Dr Salleh took Rafizi to task.

“Obviously he doesn’t know anything about business. In any new business, you don’t make money for the first few years because there are investment costs. You need to put up buildings, infrastructure and make investments.

“The first year, we were struggling; the second year, we were getting better and for the third year, we are doing well. By 2012, our returns will be positive. And we have 27 more years to go.”

By this time, Dr Salleh has managed to get over his media shyness to deliver a jibe that Rafizi should not advise the Selangor government on how to do business.

“He would close everything down due to his inexperience,” he says. “(PKR’s) Tan Sri Khalid Ibrahim was running Guthrie and has experience running real companies. I suggest he understudies Tan Sri Khalid before making any critical decisions.”

Dr Salleh also points out that his three children who graduated from universities in the US had highly paid jobs there and it was he who forced them to return because he wanted to create skills in the cattle industry here.

“No child who graduates from university wants to be a farmer. I told them the country supported you and now you must support the country, and they reluctantly came back,” he says, adding that one of the jobs his children do now is to jaga tahi lembu (clean cow dung).

Lawyer Shafee says there is an overwhelming case to sue for defamation because every one of the allegations made is “rubbish, has been spun and not truthful at all”.

Dr Salleh says his family will sit down together to discuss whether to sue and how to proceed.

“It will be a family decision. We don’t want to rush into this. Rafizi has rushed into accusations. I don’t feel angry. I actually feel kesian (pity) for him. The anger will burn him rather than make us angry.”

Son Izmir too says he is not angry because the allegations are not true.

“But I am a bit sad that everybody else in the country may believe his over-eager accusations. We have addressed those issues and I hope the press can help disseminate this information,” Izmir says

“And I would like to invite Rafizi to take a look for himself instead of coming and screaming at us from the gate outside and then making allegations about everything when he has nothing.”

Still, people will be watching to see how Shahrizat emerges from it all. Some of her Umno colleagues, like the colourful Kinabatangan MP Datuk Bung Mohktar Radin, have demanded for her resignation over the issue.

But Muhyiddin has come to her defence, saying she doesn’t need to because she is not directly involved.

In the meantime, Shahrizat has been keeping a low profile.

Asked whether his wife has indicated she would resign, Dr Salleh only says he could not answer on her behalf.

“She, the PM and the DPM – they decide. I am only her husband. She doesn’t discuss political aspects with me. Whatever she decides, I support her 100% – as I have for the 31 years of our married life.”

Related Stories: Shahrizat to help in investigations into NFC issue, says IGP

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