Friday, October 23

Merdeka Palace bought at 50 per cent higher than current price


KUALA LUMPUR: The High Court was yesterday told that the purchase price for Merdeka Palace Hotel & Suites (MPHS) in Kuching, Sarawak by Felda subsidiary, Felda Investment Corporation Sdn Bhd (FICSB), amounting to RM160 million was much higher than the current price resulting in ‘unrealised losses’ to FICSB.

Acting FICSB chief financial officer (CFO), Azlan Mohamed Ismail, 51, said the estimated current price for 2017 was RM80 million while for 2018 the price was RM77.5 million.

FICSB bought the hotel at a price of RM160 million in 2014 from Syarikat Gegasan Abadi Properties Sdn  Bhd.

Azlan said that in 2017, the Board of Directors of FICSB had directed that a reevaluation be made on MPHS based on a report on the purchase of the hotel which was higher than the actual value.

He said that the company appointed to carry out the valuation was Syarikat CH Williams Talhar Wong & Yeo Sdn Bhd and the current value of MPHS was estimated at RM80 million.

“In addition, a tender exercise for the sale of MPHS was made by Saville Malaysia Sdn Bhd in 2018.

Two purchase offers were received and the prices offered were RM69 million and RM85 million.

“However, the purchase offer of RM85 million had been retracted after a due diligence exercise was carried out, while the RM69 million offer was raised to RM77.5 million,” said the fourth prosecution witness when reading his witness statement on the second day trial of former Felda chairman,Tan Sri  Mohd Isa Abdul Samad before Judge Mohd Nazlan Mohd Ghazali.

Azlan said that based on a reevaluation carried out by the company CH Williams Talhar Wong & Yeo Sdn Bhd, on the financial year ended December 31, 2016, an impairment was made on MPHS worth RM80 million and based on the tender exercise made by Saville Malaysia Sdn Bhd for the financial year ended December 31, 2018, the current value of MPHS was reduced to RM77.5 million.

“As such, it can be concluded that the purchase of MPHS had contributed to the unrealized losses amounting to RM82.5 million to FICSB based on the difference in the purchase price at RM160 million and the current price of RM77.5 million,” he said.

The witness said the unrealised losses were stated in the financial statement for the year ended December 31, 2016 and the financial statement for the year ended December 31, 2018.

Earlier, when replying to an additional question by Deputy Public Prosecutor Afzainizam Abdul Aziz on who among the members of the FICSB Board of Directors had directed the reevaluation of MPHS, Azlan said it was made by the previous FELDA chairman, Tan Sri Shahrir Abdul Samad and nine new directors appointed in 2017.

However, Azlan said the nine directors did not include Mohd Isa.

When asked on the latest status on MPHS, the witness said that the hotel was still operating.

On Dec 14 2018, Mohd Isa pleaded not guilty to a charge of criminal breach of trust and nine allegations of receiving bribes totalling more than RM3 million at Menara Felda, Platinum Park, Persiaran KLCC between April 29 2014 and December 11 2015.

The trial before Justice Mohd Nazlan continues today. — Bernama