Putrajaya insists EPF loan to Felda a good investment

KUALA LUMPUR, June 30 The government continued to defend today the RM6.5 billion loan taken by Felda from the Employees Provident Fund (EPF), pointing to last years profits of RM1.2 billion and a good record of loan repayments in the past.

Deputy Minister in the Prime Ministers Department Datuk Ahmad Maslan told reporters that EPF had issued the loan because it considered the injection of funds into the federal land developer a good investment.

One, they said it is a good investment with low risk and two, it will bring dividends to 12.8 million Malaysian citizens who contribute to the fund, he said.

Ahmad added that Felda also borrowed a total of RM4.9 billion from the World Bank, Asian Development Bank and other investment funds from the Middle East in the early 1980s but paid them off 14 years ahead of schedule in the year 2000.

The Pontian MP was responding to repeated attacks from the opposition and a segment of Felda settlers who have accused the federal agency of borrowing from the EPF to solve its financial woes.

Critics have claimed that Feldas reserves had shrunk from RM4.08 billion in 2004 to just RM1.35 billion in 2009 and was using retirement funds of Malaysian workers to shore up its finances.

But Ahmad, who handles Felda on behalf of the Najib administration, said Feldas liquid position has improved to RM2.8 billion, and its investments in shares could easily be sold to increase its cash reserves to RM10 billion.

The Umno information chief also refuted the oppositions insistence that Felda was on the verge of bankrupcy, stating that it currently held assets of RM19.2 billion and made a net profit of RM1.2 billion last year and is projected to earn a similar amount this year.