Frankly Speaking: Time for a reset
It could be said that these factors, coupled with the appointment of politicians at the helm, created the right environment for irregularities to take place.
(The Edge) – The Federal Land Development Authority’s (FELDA) success in resettling the rural poor and eradicating poverty since its establishment in 1956 cannot be disputed.
But since the listing of its commercial units on Bursa Malaysia in 2012, things have been going downhill for the statutory body. For instance, the 2022 Auditor-General’s Report (AG’s report) flagged FELDA’s ability to continue as a going concern, pointing to its cash balance of RM808 million at end-December 2022 against its commitments totalling RM1.561 billion.
The report urged FELDA, among other things, to reduce its reliance on the federal government for financial assistance, having turned to the government and financial institutions to meet its operational costs and to service its liabilities.
The AG’s report also highlighted that Lembaga Tabung Angkatan Tentera (LTAT) had failed to account for a total of RM812 million in impairments on investments at its subsidiaries, including a RM768 million investment in Boustead Holdings Bhd and a RM44 million investment in pharmaceutical company Pharmaniaga Bhd. This resulted in the armed forces fund overstating its net profit. In fact, LTAT would have made a RM379 million net loss in 2022 had that RM812 million impairment been taken into account.
The AG’s report also flagged state-owned PR1MA Corp Malaysia’s status as a going concern as it wouldn’t be able to meet its debt obligations based on its liquidity position.
PR1MA, under the purview of the housing and local government ministry, is tasked with planning, developing and providing affordable homes for middle-income Malaysians. With its liabilities exceeding assets, its shareholders’ funds are in deficit (read story on Page 12).
What went wrong? Should more taxpayers’ money be used to bail them out?
For FELDA, the white paper published in 2019 pointed to governance failure, weak internal controls and lax checks and balances, among other factors, as the root causes of its problems.
It could be said that these factors, coupled with the appointment of politicians at the helm, created the right environment for irregularities to take place.
Without an honest review and revamp, not just at FELDA, LTAT or PR1MA, but also at the other government bodies mentioned in the AG’s report, will anything change? If not, their financial woes will hinder the progress of the nation, as the government needs to shovel more and more resources to keep them afloat.
