The Federation of Malaysian Consumers Association (Fomca) has raised questions of ethics involving the sale of a company belonging to Agriculture Minister Effendi Norwawi to a company listed on the Kuala Lumpur Stock Exchange.

It was announced last Thursday that Effendi's company Enfari Sdn Bhd was to be sold to Great Wall Plastic Industries (GWPI) for RM250 million, and this has led to a surge in the latter's share price of 16 per cent yesterday.

The Enfari sale also involved a lucrative government contract. In 1998, the company secured a contract to build 10,000 apartments as teachers quarters. This was done through a wholly-owned subsidiary, Encorp Systembilt, which was awarded a 30-year concession by the government to plan, design, develop, construct and complete the apartments to be located throughout Malaysia.

The concession agreement provided that the apartments be constructed in three phases within a period of four years.

Fomca president Prof Hamdan Adnan noted that while Effendi was not a minister when he acquired the contract, he was already a prominent politician cum businessman in Sarawak. Effendi was appointed Agriculture Minister by Prime Minister Mahathir Mohamad after the November snap polls.

Last week, GWPI announced to the KLSE that it proposed to acquire 100 per cent of Enfari for RM250 million through the issue of 75.528 million new shares at RM 3.31 a share. The new shares will be issued to the vendor, Enfari Ltd, which will subsequently renounce the shares to its nominees, Effendi and Efieda Effendi.

According to Hamdan, other questions that need to be answered include the procedure of the apartment tenders, the number of bids received and whether there was a conflict of interest for a politician-businessman's company to be given the contract in the first instance.

"We want to know if Effendi had declared his interest when his company bid for the government contract in 1998," he added.

Hamdan said that it would be necessary for the government to re-tender the contract to build the teachers' quarters to demonstrate transparency in government.