IN 2016, Malaysians were variously entertained and provoked by one exposé after another on state investor 1Malaysia Development Bhd (1MDB).

The scandals did not let up in 2017, as Malaysians were treated to a buffet of revelations of fraud, power abuse and impropriety involving a greater range of statutory bodies and agencies.

Malaysians were informed of alleged wrongdoings in Felda and Mara, both of which lost millions of ringgit because of mismanagement, bad business decisions, corruption, and power abuse.

Graft-busters were kept busy investigating allegations of dodgy land and property purchases, as well as fraud and theft of public funds.

Below is a compilation of the scandals that broke last year, some of which are still developing as investigations continue.

Federal Land Development Authority series of controversies

Last year will probably be remembered as Felda’s year – for all the wrong reasons. 

Once internationally hailed as a successful example of rural poverty eradication in a third world country, the agency last year gained a reputation for shady land deals, bad business decisions and leadership tussles. 

The various controversies that had brewed among its subsidiaries came to a head when boss Mohd Isa Samad was replaced and investigated for corruption. 

Isa was chairman of Felda and the agency’s plantation arm Felda Global Ventures (FGV).  He was also non-executive director at Felda Investment Corporation (FIC).  

He was replaced as Felda chairman in January by Johor Baru MP Shahrir Samad. 

In June, he was forced out of FGV following a feud with FGV chief executive officer Zakaria Arshad.

Malaysian Anti-Corruption Commission (MACC) launched an investigation into allegations of impropriety in late payments from Afghan company Safitex for palm oil products supplied by FGV’s subsidiary Delima Oil Products Sdn Bhd.

Zakaria was cleared of wrongdoing and resumed duty at FGV in October.

When FGV made its debut on Bursa Malaysia at the end of June 2012, it was the second largest initial public offering (IPO) in the world that year at US$3.1 billion (RM9.93 billion), after Facebook.

But a string of ill-advised acquisitions over the years had caused its market capitalisation to plunge by 65%, wiping out some RM13.4 billion in shareholder value.

Some of FGV’s most questionable deals include the purchase of Cambridge Nanosystems Ltd, which produces high-grade carbon nanotubes and grapheme. It has lost at least RM117 million in the last four years.

A fraudulent joint venture between FGV’s Felda Iffco Sdn Bhd and Abu Dhabi-based food manufacturer IFFCO resulted in a RM23.6 million loss. 

On December 29, FGV’s share price was RM1.69, a far cry from the RM4.84 of July 2012.

Felda’s UK and Sarawak hotel purchases

Not long after the FGV board tussle, in July, MACC opened investigations into a Felda subsidiary’s purchase of a four-star hotel in the affluent Kensington district of London.

FIC had allegedly bought the property in December 2014 for £60 million (RM330 million), a price allegedly far above the market rate.

The MACC also looked into FIC’s purchase of a hotel in Kuching for RM160 million but which was worth RM50 million.

Isa, who was FIC non-executive director at the time, was arrested and remanded in August to assist investigations.

Felda’s Jalan Semarak land deal 

Another Felda bombshell was dropped before the end of the year when Malay daily Berita Harian reported that the titles for four parcels of the agency’s land in Jalan Semarak, Kuala Lumpur, worth RM270 million, were transferred under dubious circumstances.

The Felda board of directors claimed to be in the dark regarding the transaction, but chairman Shahrir claimed the deal had the appearance of fraud.

The titles for the parcels of land were transferred to Synergy Promenade Sdn Bhd, a company appointed and given power of attorney by FIC to develop Kuala Lumpur Vertical City (KLVC) on the land.

But an internal probe found that KLVC’s developer had transferred ownership of the land to Synergy Promenade. 

Shahrir has said Felda will do everything within its power to reclaim the land. 

Mara Australian property scandal

Like Felda, Mara, or the People’s Trust Council, is meant to be an agency to help the poor. 

Exposés by Malaysiakini alleged that its officers defrauded millions by buying property in Melbourne through middlemen. 

Mara paid A$41.8 million (RM138 million) to buy Thrush Cross Land Holdings Ltd, a US$2 shell company incorporated in the British Virgin Islands, because of a building in Melbourne the company purportedly owned.

In January 2013, five months after Mara bought the shell company, Thrush Cross Land paid the actual owner A$23.5 million for the 12-storey building.

On July 19, 2013, top officials of Mara Inc mortgaged the property to raise money to buy another building in Melbourne – Dudley House. 
The transaction is also being investigated for fraud, corruption and money laundering.

Fairfax Media reported that the cost of the Melbourne student accommodation building was inflated by A$4.75 million to “pay for kickbacks”.

In the wake of the scandal, the MACC launched an investigation and detained several people who were later released without charge, while the Australian Federal Police has also conducted an investigation.

Johor exco in shady land deals 

Johor exco Ab Latif Bandi, his son and real estate consultant Amir Shariffuddin Abdul Raub were charged with 21 counts of money laundering and 33 counts of receiving RM30.3 million in bribes. 

The bribes were allegedly paid by property developers to have   bumiputera lots converted to non-bumi at a lower rate.

Latif and Amir were accused of accepting the bribes to reduce the 7.5% charge to change the status of bumiputera lots.

DAP, however, claimed the scam went all the way to the top and also involved Johor Menteri Besar Khaled Nordin. 

In a Johor assembly sitting, Senai assemblyman Wong Shu Qi asked Khaled to respond to allegations that he received RM12 million in kickbacks in the lot conversion deal.

Sabah Water-gate

In December, former Sabah Water Department deputy director Teo Chee Kong was charged with 146 counts of laundering  RM32 million in one of MACC’s biggest cases.

Teo, 52, claimed trial to 78 counts of money laundering under Section 4(1)(a) of the Anti-money Laundering, Anti-Terrorism Financing Act and Proceeds of Unlawful Activities Act and 68 counts under Section 4 (1)(b) of the same act.

He was detained along with other department officials on suspicion of misappropriation of project funds. 

MACC confiscated jewellery, handbags, cars, land titles and other items worth around RM114 million, along with RM53.7 million in cash, found in their possession.

MACC said it was its biggest ever seizure of cash.

Armed forces’ investment losses

In August, Pandan MP Rafizi Ramli claimed that the Armed Forces Fund Board (LTAT), a military pensions fund, had lost RM120 million in investments.  

Rafizi said LTAT’s 2016 financial report showed a RM120 million share impairment. 

The board recorded higher revenue in 2016 (RM811 million) compared with 2015 (RM767 million), but paid the same 12% dividend to contributors in both years.

Rafizi has filed a parliamentary query to the government but has yet to receive an answer. 

TRX land sale to MoF company 

Although sale of land at the Tun Razak Exchange (TRX) to Tabung Haji and LTAT occurred in 2015, the controversial deal made the news again last year. 

DAP lawmaker Tony Pua said Putrajaya had continued to keep details of the sale under wraps even though it involved two government-owned entities.

Aroma Teraju Sdn Bhd, a wholly-owned subsidiary of the Finance Ministry, had bought the TRX land from 1MDB. 

In a reply to Pua’s parliamentary question, the ministry cited a confidentiality clause as the reason for the non-disclosure.

This led Pua to claim that the ministry was trying to cover up the fact that it had paid top dollar to buy back a fraction of the prime land that it had sold to 1MDB in 2010 at bargain basement prices.  – January 1, 2018.