November 18, 2011
NFC defends purchase of Luxury Condo Units in Up-Market Bangsar
by Clara Chooi (11-17-2011)
Dogged by claims of irregularity, the National Feedlot Corporation (NFC) finally broke its silence today to defend its purchase of multi-million luxury condominum units in Bangsar as a “good business decision”.
In a press briefing opened to selected mainstream media organisations, its chairman Datuk Seri Dr Mohamad Salleh reasoned that the investment had helped yield better returns for the NFC project compared to keeping the money in a bank.
It was also revealed then that the NFC owns two units at the upmarket condominium, as opposed to one as previously reported.
According to Berita Harian Online, however, Mohamad said the condominium units had cost over RM6 million each, instead of the RM9.8 million originally alleged by PKR.
Mohamad reportedly claimed that the money, if held in a bank, would have only yielded 2.6 per cent in annual returns.“[Real estate investment] can generate annual profits of up to 12.9 per cent as well as cash rebates and rental yield of RM900,000 for the first year, which is channelled to the company and not to any individual,” the Malay daily quoted Mohamad as saying during the briefing.
The Berita Harian report, however, did not state if Mohamad, the husband of Cabinet Minister Datuk Seri Shahrizat Abdul Jalil, had explained whether the federally-funded National Feedlot Centre had been allowed to make such alternative investments.
“There are still many projects under the NFC that are yet to be carried out.As such, while waiting for their implementation, I figured the grant money that was yet to be used should be invested so we can generate profits,” he said.
Despite disputing PKR’s allegations of corruption against his company, Mohamad said he was yet to decide if he should take legal action against his accusers, particularly PKR strategy director Rafizi Ramli.
“The whole family must sit together and discuss this before deciding further what action we should take,” the daily quoted him as saying.
PKR was first to expose details of the now-scandalised NFC project and recently revealed that Mohamad’s company had spent a whopping RM9.8 million to purchase the condominium unit.
Its secretary-general, Saifuddin Nasution, said the luxury apartment at One Menerung, Bangsar, was recorded by NFC, a cattle farming project managed by the minister’s family, as part of a RM83 million “loan” to NMLC.
But UMNO Youth chief Khairy Jamaluddin savaged the party for the allegations, claiming the condo was bought as an investment when the NMLC found itself with excess funds when the government ran out of funds to develop satellite cattle farms.
Khairy has also claimed the condo had appreciated in value since it was purchased. He did not, however, specify the rental yield.Many real estate experts have concluded that Kuala Lumpur is facing a glut of luxury properties, with rental yields falling as much as 50 per cent in some cases.
The Auditor-General’s Report released last month had criticised the NFC, pointing out that it was now “in a mess”. The report said production in 2010 was only 3,289 head of cattle or 41.1 per cent of the target set.
Agriculture Minister Datuk Seri Noh Omar, however, responded on October 31 that the project is a success and had met its targets.