FPDSB gave out loans for companies that did not fulfil requirement, audit reveals

John Bunyan
The objective of FPDSB establishment has been achieved, the auditor report stated. — Bernama file pic

IPOH, July 15 — The Forest Plantation Development Sdn Bhd (FPDSB) gave out loans to companies that did not fulfil the necessary requirements, according to the Auditor-General 2018 report.

The audit report said that this has resulted in delay payment of loan from the companies which had borrowed the fund.

FPDSB, which is fully owned by Malaysian Timber Industry Board, has distributed funds to three companies for the purpose of nurseries development programmes, namely Company 24, 25 and 27.

“Company 24 was given a loan despite not fulfilling the criteria of own land ownership or at least lease for 20 years and operating in government-owned land instead.

“While company 25 and 27 show a weak financial status as they were newly formed. Only Company 25 has settled half of the debt while Company 27 did not pay at all,” the report read.

The report said that evaluation on the application from the companies which borrowed fund is incompetent because no detailed justification was done on whether they have actually met the criteria.

The auditor report also said that four companies did not reach fulfilment of 70 percent compulsory farming area despite being paid full loan amounting RM100 million.

In addition, the auditor report also said that all incorrect shape file has to be revised as it is difficult to monitor the land effectively.

However, the auditor report stated that the objective of FPDSB establishment has been achieved.

“FPDSB’s financial position is stable as it obtains management grants and development loans from the Ministry of Finance and Primary Industry Ministry for the period of 2015 to 2017 to cover its operating expenses and to finance the forest farming development programme,” the report read.

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