Shahrir refutes Rafizi's allegations; EPF loan not used for London hotel purchase

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KUALA LUMPUR: Federal Land Development Authority (Felda) has rubbished claims it had borrowed money from the Employees Provident Fund (EPF) to buy a hotel in the UK.

“The RM6.5 billion loan from EPF, obtained in 2009, was to provide funds for the replanting programme by Felda settlers and for FGV in its investments activities,” Felda chairman Tan Sri Shahrir Abdul Samad said in a statement today.

Shahrir, who is also Johor Baru Umno division chief, was responding to allegations made by Parti Keadilan Rakyat (PKR) vice-president Rafizi Ramli that Felda’s planned sale of the Grand Plaza Bayswater Serviced Apartments was originally funded by EPF.

Rafizi went on to say if Felda were to sell it now, there would be huge losses.

“The decision to receive funds from EPF was done after rationalising on the financial structure.

“Currently, Felda has paid back the EPF loan in principal and the profits according to the schedule imposed by it, which is due to be settled by 2023.

“Rafizi is not aware that Felda is a statutory body which has its own income resources without any financing from the Federal government since 1996,” Shahrir said, adding Felda’s operations are not tied to taxpayers or settlers money.

Sharir added the planned sale of the London property is part of Felda’s reorganisation of its assets to strengthen its financial position.

This is just part of Felda’s ongoing monetising of other assets which are not core to its operations.

On Rafizi's claim of a mysterious operating expense of RM80 million, he said the allegation was baseless as the main component of the hotel’s administrative expenses was the annual lease payments.

The lease rate is the rental fee needed to be paid by FIC Grand Plaza Ltd, a company that manages the business on behalf of its parent company, FIC UK Properties Sdn Bhd.

Shahrir assured this is clearly reflected in the detailed income statement which is part of its financial statements.

He also highlighted there had been 54 representatives who have shown interests in purchasing the property and the sale process is in its final stages.

“I am convinced the sale of this hotel is in line with Felda’s direction to return to its core business and will have a positive impact on Felda’s finances.

“This will also help Felda to focus on settlers’ plantation management to ensure that they get a high income while ensuring their welfare and well-being are protected,” he said. © New Straits Times Press (M) Bhd