PAC confirms MACC nabbed 2 Felcra officers over troubled RM1.2b project

The arrest of Felcra officers last month was related to the troubled Menara Semarak 20 project, the Public Accounts Committee (PAC) has confirmed.

During a press conference, PAC member Zahir Hassan explained that the arrest resulted from the diligent work of MACC officers, who were actively involved in the PAC procedure on the project.

“We discovered, among others, issues with the management of the Semarak 20 project.

“Initially, the project was planned as ‘design, build and finance’, but it was later changed to ‘design and build only’, excluding finance,” he revealed.

Semarak 20 is a mixed-development project located at Jalan Semarak. It includes the Menara Felcra office tower, a 43-storey serviced apartment building, a mall, and an international convention centre.

The project was launched in December 2017, but its construction has been halted amid Felcra’s financial crisis.

Fund transfers

In 2019, Berita Harian reported that Felcra is open to discussions with companies interested in continuing the development, which was about 42 percent complete then.

Bernama reported on May 15 that two senior officers of a statutory body were arrested on suspicion of abusing power and misappropriating funds from the Finance Ministry for a development project worth RM1.2 billion.

The suspects were believed to have transferred part of the funds to contractors and consulting companies for purposes unrelated to the development.

The PAC addressed issues related to Felcra Berhad, as reported in the Auditor-General’s Report 2021 Series 2 on managing a government-owned company.

The report stated that Felcra’s debt arrears were RM312.22 million as of Dec 31, 2021, up from RM82 million the previous year. By the end of 2021, Felcra also owed the government RM3.67 billion.

Additionally, the federal government did not receive dividends from Felcra between 2019 and 2021. On Aug 4, 2022, the Dewan Rakyat approved converting the RM312.22 million loan from a government loan to equity.

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