The Auditor-General report has criticised the Federal Land Development Authority (Felda) for violating its ceiling on investments of listed and non-listed shares three years in a row.

azlan Felda has set an annual limit of 24 percent of its funds to be used in the investment of shares but from 2008 to 2010, had invested more than its stipulated ceiling as stated in its group investment policy and strategy manual.

The limit is to reduce risk to Felda funds which comprise of Felda's accounts and settlers' accounts.

The manual is approved by the Felda Board of directors.

Felda's investments were :

2008 RM713.2 million (31.8 percent of total funds)

2009 RM2.282 billion (70.7 percent)

2010 RM3.140 billion (68.5 percent)

This, the Auditor-General warned, would affect Felda's financial capability and affect its daily operations if the investments did not generate profit.

It noted that while some of the shares obtained profit, 12 counters made losses between Dec 31, 2008 and Nov 30, 2010.

Of the 12, four counters namely PK Resources Bhd, Takaful (M) Bhd, Telekom Malaysia Bhd and Tradewinds Corporation Bhd, had continuously faced losses since 2008.

Eight of the counters had paid dividends to Felda amounting to RM33.11 million between 2008 and 2010.

Prior to the revelations in the Auditor-General's report, there were allegations that Felda's cash reserves were low.

It was reported in 2010 by the deputy minister in the Prime Minister's Department, Ahmad Maslan, that Felda's cash reserves had depleted by almost RM3 billion in five years.

This led to the National Children of Felda Settlers' Association (Anak) lodging reports to the police and the Malaysian Anti Corruption Commission.

The Auditor-General, Ambrin Buang, noted that while Felda managed to dividends in excess of 10 per cent, it had to do more research on its investments to ensure optimum returns and reduce exposure to high risk investments.

Risda blasted for construction delays

Another subsidiary company Rubber Industry Smallholders Development Authority (Risda), was chided for delay in the construction and completion of houses for smallholders,

NONE Not only that Risda was also blamed for the poor workmanship in the construction of the new houses.

The AG team visited houses in Selangor and Terengganu in Oct 2010 and noticed that 75 houses were not built according to the right specifications and the work unsatisfactory.

It listed 42 houses visited that suffered cracks, bedrooms built not according to specs (30), leaks in the ceiling (11) and other problems.

The report lists poor monitoring of the project contractor. It also found that some of the recipients of the houses built by Risda, were not qualified to receive them.

It proposed better vetting of candidates to ensure they qualified to receive assistance.

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