Grand Borneo’s profit sharing could not be determined as financial statements for 2019, 2020 and 2021 had yet to be finalised, the audit found.

It added Grand Borneo failed deliver on all its objectives, with the company generating no profits in 2019 and 2020, with an accumulated loss of RM49.88 million in 2020.

It attributed Grand Borneo’s unstable financial position to its low room occupancy rate, which stood at 42.9% and 67.5% in 2020 and 2021 respectively, well below its targets.

The company had also failed to collect arrears amounting to RM225,626 within the stipulated 120-day period, although prior action had been taken against debtors.

The report recommended that the company’s stakeholders enhance promotional and marketing efforts.

“Efforts to attract more visitors need to be improved by taking into account the attractions or tourism products of the local people surrounding the resort,” it said.

Grand Borneo was advised to replace and repair any damaged facilities immediately. This would help increase the company’s profits and improve its corporate governance practices.

The report also recommended the company review its policy on credit payments by ensuring all bills are fully paid before customers leave its premises, and to take proactive measures to collect arrears before the stipulated 120-day period is exceeded.

Felda had given the company the responsibility of managing Grand Borneo Hotel Kota Kinabalu until operations were halted on Dec 31, 2021.

Grand Borneo now manages five resorts — Felda Residence Hot Springs, Felda Residence Kuala Terengganu, Felda Residence Tg Leman, Felda Residence Tekam and Felda Residence Sahabat.