Tuesday, December 27, 2011

NFC chairman: ‘I am not angry but the bull claims better stop’


Datuk Seri Dr Salleh Ismail, the husband of Women, Family and Community Development Minister Datuk Seri Shahrizat Abdul Jalil, deals with the Frequently Asked Questions over the controversy surrounding the National Feedlot Corporation. The Auditor-General's Report described the cattle project as 'a mess'

Question: Your family's name has been smeared.. Are you angry?

Answer: I am not angry because his (Parti Keadilan Rakyat strategy director Rafizi Ramli) allegations are not true.

But I am sad because everyone believes them. Rafizi has made allegations. I pity him. His intentions are not good. We do not even know him. In fact, we were surprised.

But we know it is a political ploy because we have not failed in our business. The first year, we were struggling to find the right people to sell us cattle... in Australia and other countries, marketing experts, and all the know-how. We are new. The second year, we kicked off the project and the third year we are doing a lot better.

Anyone knows that for any big business, the first two years are difficult. But with proper planning and strategies, the third year onwards, there are profits to be shown.

Question: Who leaked out the details?

Answer: Two of my high ranking staff. One resigned two weeks' ago, taking with him a thumbdrive that had half the details. The other resigned about few months ago. We have made police reports against them.

We noticed that the thumbdrive was missing only on Tuesday. The two of them have only half the information that is why they told the opposition half the story.

Question: Will you sue PKR over the allegations?

Answer: I will sit with my family to discuss. I think we have to think a lot. Consult our lawyer (Datuk Seri Shafee Abdullah). My family will discuss the issue first.

Actually, I don't feel anything towards Rafizi over all his statements. But if they continue, we will re-look the situation.

Salleh was also asked to comment on a range of other allegations thrown at him and his family concerning the NFC.

Allegation one: On the acquisition of a condominium in One Menerung, Bangsar, amounting to RM13.8 million, the opposition had claimed: "The total value of the luxury condominium was RM9.8 million. It has nothing to do with feedlots."

Answer: We bought two units. Not one. The acquisition of the condos was a commercial decision exercised by the board of directors to hedge unutilised funds for the abattoir project, which was delayed through no fault of NFC. Leaving the funds in fixed deposits would be less controversial but would not give the company the necessary yield for funds of this size.

Firstly, the condos were bought at a 20 per cent discount and had a guaranteed rental of RM30,000 per month, all of which is credited to the NFC group.

Assuming the RM13.8 million was put into an FD at 2.75 per cent interest a year, this would yield RM379,500. Just rental at RM30,000 a month would yield RM360,000 (a year).

Since the property was bought at 20 per cent below market value, assuming it is resold at market price, an additional RM2.76 million would be added to the value, plus one year rental of RM360,000. The profit will come to RM3.12 million. This will bring 22.6 per cent yield instead of the 2.75 per cent.

The purpose of the loan was undoubtedly for cattle farming and infrastructure. Therefore, buying the condos was a departure from the purpose of the loan.

But since the properties are kept under the name and books of the company, it is simply a matter of converting the property back into cash at a desired profit.

Allegation two: "Our society has evolved in recent years that it is no longer acceptable that a minister can easily secure a RM250 million soft loan and a vast tract of land when there are thousands of more experienced breeders who could qualify for such a grant."

Answer: NFC received a loan of RM250 million and not a grant. This loan must be repaid as any commercial loan, though certain concessions are given.

The balance of factors must be seen for NFC's social obligations to create "contract farming" for the Malaysian industry, which is not necessarily profitable for NFC. This social obligation or national obligation must be also considered as a basis for certain friendly concessions granted in the whole scheme of things.

Allegation three: Travelling expenses amounting to RM827,579 when only 1,618 cattle were slaughtered two years ago. This means travelling expenses per cattle was RM511, amounting to 11 per cent of the RM4,481 price per cattle.

Answer: The RM827,000 is only about 0.3 per cent of the RM250 million, which is a very small amount of the project value.

In the initial stage of NFC, it is obvious that NFC's management would be travelling to and fro to Australia to meet consultants and for purchasing cattle. This expenditure was expected and budgeted. The choice of words such as study visits is deliberately mischievous as it connotes "frivolous holidaying" as opposed to working trips.

Allegation four: The tabloid Sinar Harian reported on Nov 14 that Rafizi had met officers from the Agriculture and Agro-based Industry Ministry who had objected to the project as early as 2006. However, these officers were helpless in voicing out their opinions when decisions were made by those above them.

Answer: NFC wasn't in existence in 2006 and if their objection lies squarely in the viability of the project, then there should not be so much reference to the personalities, but more reference to the project viability.

This is clearly an attack against the minister and her family. The opposition has its own objectives.

Allegation five: The price per head of cattle is RM4,500 but the price for cows in Malaysia is known to be RM2,500 to RM2,700.

Answer: Malaysian cows weigh about 300kg while those fed by us weigh double. There is 65 per cent meat compared with 40 to 45 per cent in local cows.

Furthermore, we sell meat as opposed to cattle. It is not a fair comparison.

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