Kuala lumpur: The National Audit Department (NAD) has called for a review of the oil palm plantation acquisitions under the Federal Land Consolidation and Rehabilitation Authority’s (FELCRA) transformation plan to ensure that investments yield “value-for-money” returns in line with its financial capabilities. This recommendation was part of the Auditor-General’s Report 2/2025, which was presented at the Dewan Rakyat today.
According to BERNAMA News Agency, the report emphasized the need for the FELCRA Berhad board of directors to ensure that acquisitions are executed in accordance with their fiduciary duties and good governance practices. The report also advised enhancing administrative processes and stipulated that decisions regarding acquisitions should align with previous resolutions and the company’s constitution. Any modifications to board decisions should be documented through a clear resolution, with organized minutes recorded by the company secretary as per FELCRA Berhad’s Constitution.
The NAD recommended setting a minimum timeline between the approval and implementation of agreements to allow for adequate risk assessment and review. The report also suggested improvements to the Acquisition Manual, effective since September 2024, including the appointment of qualified external consultants for due diligence and market value assessments. These consultant reports should be presented to the board as essential documents in making investment decisions. A comprehensive financial study covering break-even points, return on investment, hidden costs, mortgage liabilities, and physical rehabilitation needs should precede any final decision.
Furthermore, the report called for inspection and certification of moveable assets before and during the process of vacant possession to ensure asset ownership as per the agreement. Verification of physical assets and preparation of a complete asset register of all farm machinery and facilities should also be conducted according to the relevant agreement.
Auditor-General Datuk Seri Wan Suraya Wan Mohd Radzi highlighted governance weaknesses related to the acquisition of four oil palm plantations by FELCRA Berhad. These acquisitions involved the Telupid Estate in Sabah, and the Dabong Estate, Sungai Raiwt 2 Estate, and Aring Estate in Kelantan, valued at RM241.76 million between 2022 and 2024.