KUALA LUMPUR, Feb 16 — Felcra Bhd was unable to settle debt arrears amounting to RM312.22 million in 2021, up from RM82 million in the preceding year, according to the Auditor-General’s Report (LKAN) 2021 Series 2.
It said based on the verification letter dated January 10, 2022, from the Accountant General’s Department on loans outstanding and arrears due to the federal government, Felcra still owed the government RM3.67 billion as at December 31, 2021.
“The balance amount represented 69 per cent of Felcra’s total liabilities of RM5.32 billion,” the report said.
The report said that based on Felcra’s feedback, the government, following the Dewan Rakyat’s approval on Aug 4, 2022, converted part of the debt amounting to RM969.27 million into equity in Felcra.
LKAN 2021 Series 2 said in terms of its financial key performance indicator for 2021, Felcra responded that it did not achieve only one of the six perspective indicators: the lowering of administrative costs.
Felcra attributed the failure to an increase in spending due to its corporate social responsibility programme totalling RM10 million that was not budgeted for earlier in the year.
On the whole, based on the audit’s scope, Felcra’s objective of consolidating, reviving and developing its members’ lands was achieved through the main activities of carrying out its social mandate (through the Consolidation and Rehabilitation Plantation Management, or P&P, programme) and commercial business.
“In terms of yield, the government received no dividend from Felcra for the period of 2019 to 2021, although the P&P programme has positively impacted and improved the living standards of Felcra members through dividend distribution,” the report said.
Inefficient management
The report also found that Felcra’s plantation management was inefficient as it did not adhere to fertilisation and harvesting schedules, and based on foreign workers who overstayed under their temporary work visit passes.
It said as at April 2022, none of Felcra’s subsidiaries had paid dividends from 2019 to 2021 as the financial statements for the period were yet to be finalised.
“Stakeholders must take action to help (Felcra) participants who have yet to receive their dividends and resolve the issues of operating costs and unviable projects. Undistributed dividends amounting to RM67.14 million must also be paid out to participants and trustees as soon as possible,” the report said.
“Felcra is also encouraged to maximise plantation workforce recruitment in line with its requirements in order to improve harvest yields and optimise revenue, as well as utilise digital management and maintenance systems at its palm oil mills in line with the country’s Fourth Industrial Revolution development,” the report added.
In 2021, Felcra had 108,097 members and secured plantation land totalling 203,953 hectares. It distributed RM801.05 million in dividends to its members from 2019 to 2021.
As of April last year, Felcra had shareholdings of between 53 per cent to 100 per cent in 22 subsidiaries and was involved in nine joint ventures with shareholdings of 8.75 per cent to 50 per cent. — Bernama
