Najib defends Felda investment in Eagle High Plantations

Former prime minister Najib Razak.

PETALING JAYA: Najib Razak today defended Felda’s investment in Indonesia’s Eagle High Plantations TBK (EHP), urging the Pakatan Harapan-led government to make public the agreement signed between the two companies.

This comes after Felda lodged a police report yesterday claiming it was cheated by Najib into investing US$505 million (RM2.3 billion) in EHP, owned by Peter Sondakh who is said to be a close friend of the former prime minister.

In a Facebook post, Najib said he had called on the government in early February to reveal that a “put option” was part of the agreement, yet Putrajaya remained silent.

Najib said the “put option” would allow Felda to sell back its 37% to EHP at the original purchase price plus the 6% annual interest charge borne by EHP.

“In other words, if we did not want to continue with the investment, we could claim all the money we paid plus 6% annual interest.

“The money we used to pay for the investment was borrowed through bonds with an interest rate of 3.85%,” he said.

Najib said this meant that if EHP succeeded and the price of palm oil recovered, the investment would bring in huge profits.

“On the other hand, the government would still profit if it sold back the shares because the interest we subjected EHP to was higher than the cost of our loan.”

At the end of the day, he said, public funds would still be ensured, and the government would not suffer any loss.

He said this disproved the claim that Felda would suffer losses by buying into EHP.

He said PH should stop lying to the public by playing up propaganda to attack him, and urged the government to reveal the agreement between Felda and EHP.

“Just admit that the main reason Felda is suffering losses now is because the price of palm oil fell below production costs after GE14.”

In the police report lodged yesterday, Felda director-general Othman Omar said the amount paid to acquire a 37% stake in EHP was 344% more than its actual value of US$114 million.

EHP is part of the Rajawali Group owned by Sondakh.

Othman said Felda took a RM4.8 billion loan to finance the deal from GovCo Holdings Bhd (GovCo), a subsidiary of the finance ministry then headed by Najib.

“Following the purchase by Felda at RM2.3 billion, it suffered losses when the value as of last month was just RM555 million,” Othman said.

He said Najib had in 2015 directed Felda through its special purpose vehicle FIC Properties Sdn Bhd to invest in EHP, after earlier approaching Felda’s FGV Bhd as well as the Malaysian Plantation Oil Board (MPOB) and Malaysian Rubber Board (MRB).

Othman said the deal, signed by then-Felda chairman Isa Samad, was “one-sided” and “risky”, adding that EHP had debts of US$547.4 million in 2014 and liabilities of US$676.9 million in 2016.