FORMER prime minister Najib Razak has been named in a police report lodged over Felda’s inflated purchase of Eagle High Plantations from an associate, Indonesian tycoon Peter Sondakh.

The police report was lodged by director-general of Felda Othman Omar yesterday at the Kuala Lumpur police commercial crime unit, said The Edge Markets.

Othman named Najib, who was also then finance minister, as having directed Felda to enter the “one-sided” deal for EHP owned by the Rajawali Group in 2016.

The Edge, which sighted the police report, said Othman claimed the Finance Ministry and Felda knew “there were many risks involved in the deal”, which saw Felda buy a 37% stake in EHP for US$505 million (RM2.3 billion), when the stake was valued at only US$114 million.

This represented a 344.12% premium.

Othman in his report said Najib as the finance minister “had directed Felda to invest in EHP” and this was contained in the ministry’s letter to Felda dated December 8, 2015.

In 2016, Felda and the special purpose vehicle that conducted the purchase FIC Properties Sdn Bhd (FPSB), were warned against the acquisition by consultants KPMG Malaysia, BDO Malaysia, Indonesian law firm Hiswara Bunjamin and JP Morgan.

Othman detailed some red flags in the buy that included EHP’s total debts of US$547.4 million for 2014 liabilities of US$676.9 million in 2016.

Another was that EHP did not have accreditation from the Roundtable on Sustainable Palm Oil (RSPO) and based on documentary evidence, would “not be able to achieve RSPO certification even after 10 years”.

Felda did not have the financial capacity to pay US$505 million for the stake and so “Najib and his allies at the Prime Minister’s Office, Finance Ministry and Felda board of directors had caused Felda to get a (RM4.8 billion) loan from GovCo Holdings Bhd (GovCo)”, Othman added.

GovCo is a subsidiary of the ministry.

The loan resulted in Felda suffering losses of RM1.576 billion as of December 31, 2017.

Former Negri Sembilan menteri besar Mohd Isa Samad was Felda chairman at the time of the purchase and Othman said Isa “played his role” in signing the EHP deal.

Othman’s police report also alluded to the roles of other senior officials in the Finance Ministry, including a former second minister and former deputy minister as having used their “influence” to ensure the purchase went ahead.

He also claimed suspicion of criminal conspiracy on part of Felda’s previous board of directors and possible money-laundering, urging the police to investigate.

Othman said before Felda was “forced” to buy the EHP stake, the deal was offered to other agencies such as FGV Bhd, Malaysian Plantation Oil Board and Malaysian Rubber Board.

His police report comes as Putrajaya is to table a white paper on Felda in Parliament tomorrow, on plans to rescue the land scheme.

Felda is now looking to terminate the EHP deal with the Rajawali group.

Isa and other former top officials have been sued by Felda. – April 9, 2019.