By Clara Chooi
The Malaysian Insider
Nov 17, 2011
GEMAS, Nov 17 — 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.
#1 by monsterball on Friday, 18 November 2011 - 12:38 am
They are taking our money to gamble.
Make money…keep in pocket.
Exposed…take out from pocket and say how smart they are with the investment.
But one like Mahathir son….lost RM1.2billion in investment…no problem…take out another RM1.2 billion from EPF.. to save is son.
How many contributors understand they should get like..10% yearly bonus shares instead of 3 or 4%. That 5% less..all Malaysians are getting…will balance the EPF account ..one way or another.
Juggling…leave it to Govt. chosen accountants….living like lords themselves..exactly like chosen police and law makers…all filthy rich as rewards for excellent cover ups.
#2 by monsterball on Friday, 18 November 2011 - 12:44 am
Samy Vellu son gambled RM100 million poor Indians money…..lost all… and it took more than 20 years…to come out with a solutions to pay 85% back to shareholders.
They need to protect Samy…for he knows too much and help UMNO b cheat too much…
Mahathir is most afraid of him….and the Govt keep protect Mahathir with their lives.
#3 by waterfrontcoolie on Friday, 18 November 2011 - 6:16 am
The guarantee on rental for the first year or even two years is a sales gimmick. What happen after the guarantee period? it is more likely just like the big purchase of airplanes by local company, a publicity stun; of course with commissions as the fallout along the way. By the way, do check if NFL got any discount, since Bumi s can and should get discount, see who pocketed the 7% discount.
In such game, UMNO will never dare to take any action against any of its leaders as the leaders are sailing in the same boat; even those delegates who are caught in knowing the truth would not expose them. One this will sink UMNO and BN two, they are waiting for their turn along the gravy train track!
#4 by Godfather on Friday, 18 November 2011 - 6:37 am
The more they try to explain, the worse it gets. It’s two condos, not one. It’s RM 6.9 million each with developer’s rebate of RM 700,000 each, making the net purchase price of RM 6.2 million each. So it’s not RM 9.8 million investment, it’s a RM 12.4 million investment.
The PhD CEO tries to treat developer rebate as recurring income when it’s a one-time credit that should be deducted off the gross purchase price. Then he said that the rental income is RM200k per unit per year. The rental yield for a capital outlay of RM 6.2 million is roughly 3.5 pct p.a. Is this so great compared to FD interest ? Agrobank offers 3.5 pct so why didn’t they put in the bank ?
#5 by Godfather on Friday, 18 November 2011 - 6:40 am
They even claim developer’s rebate as income. Wow, so let’s overpay, get a bigger rebate, and treat the rebate as recurring income ! Who are their accountants ?
#6 by Bigjoe on Friday, 18 November 2011 - 7:14 am
The Sharizat family is making me angrier. The audacity to come up with such excuses and the irresponsibility of it. WHEN WILL IT END. It does not matter what the rental yield is. ITS BAD PRACTISE. Its wrong fiduciary responsibility. NFC is in the cattle-rearing business NOT real estate. If they rental yield is true, it just means they were lucky. If they were not, WHO would be paying for it? If they get to do this, then what can they do next? Buy speculative shares and or buy lotto?
Their arrogance deserves a slap in the face from father, mother down to the children…
#7 by undertaker888 on Friday, 18 November 2011 - 7:43 am
Only NEP retarded CEO goons can give these kind of excuses. Stealing under the name of religion is their best skill they possessed.
Steal pray steal pray steal pray steal pray steal play steal play steal play.
#8 by k1980 on Friday, 18 November 2011 - 7:50 am
Who is the tenant? Mr Ma Mak or Mr Lim Bu?
Real estate agents for One Menerung contacted by The Malaysian Insider said that it was “not possible” to get RM70,000 in monthly rent and that it would be difficult to find anyone willing to pay even RM4 a sq ft.
Figures from a valuation report on One Menerung obtained by The Malaysian Insider pegged rents for the penthouse at about RM24,000 and between RM14,000 and RM17,000 for the smaller units below 5,000 sq ft.
“Nobody would pay RM70,000 for a condo,” said one valuer.
http://www.themalaysianinsider.com/malaysia/article/rm70k-rental-for-cattle-condo-unbelievable-say-property-gurus/
#9 by Godfather on Friday, 18 November 2011 - 7:57 am
Of course they can’t get 70,000 rental in 1 Menerung. Who’s to stop them from getting a GLC tenant at this price now that the cow is out of the bag ? Manufacture a lie to cover up an earlier lie, and hope that the mainstream press won’t report it.
#10 by SENGLANG on Friday, 18 November 2011 - 8:28 am
From financial point of view that source good investment decision as the return is higher than the FD rates. But, do not fool by that arguments.
1 It was clear than the investment was not from the internal generated fund as the company have incurred losses for the past year up to 2010. Thus the money must be from the tax payers soft loan of 250 million
2 The soft loans at very much lower interest rate and basically was not secured but only by the loan agreement that the loan must be used for specific purposes, ie for the LEMBU project and no any other dick tom and sundry project no matter how profitable that may be, such as investment in Kondo etc.
3 It was the norm that the drawn down on the loan must strict conditions only that can the loan be released, from the excess fund available mean that the drawn down may not have adhere to the pre conditions set.
4 Can the government loan me 250m JUST BECAUSE i can investment in high end proprieties as the return is good?
#11 by Godfather on Friday, 18 November 2011 - 9:13 am
For too long, these goons have treated the rakyat like ignoramus, and have tried to use all sorts of numbers to confuse the rakyat. Developer’s rebate considered as recurring income. Investment counted as gross amount instead of net amount. Boast about gross income, when net income is much smaller after maintenance and sinking fund charges. Illiquid investment made to look like liquid investment.
Yes, you can con the guy squatting under the rambutan tree, but you can’t con the rest of the rakyat. Has the audacity to threaten to sue via the UMNO lawyer, but no one thinks they have the guts to proceed with their day in open court.
#12 by SENGLANG on Friday, 18 November 2011 - 9:54 am
If that was the rental return why not used all 250 m to buy 41 units of 6m each and get 37m pa rental return?
#13 by Thinking Two on Friday, 18 November 2011 - 10:19 am
1. Check who is that special tenant.
2. AMLATF please check for money laundering.
3. The rental could be bribery money for some kind of favour return.
4. MACC – your usual and famous reply “It is not corruption but over priced only”
#14 by Thinking Two on Friday, 18 November 2011 - 10:21 am
That’s why so many sub-contractors like to lost golf betting of RM20,000.00.
You know what is that for…….
#15 by SENGLANG on Friday, 18 November 2011 - 11:16 am
We always trapped into all sort of arguments and justifications. Most of the time the explanation was simply could not hold water. The real issue here was what we need to decide was ” IT IS RIGHT TO USE THE FUND FROM THE SOFT LOANS TO INVESTMENT OR SPEND ON ANYTHING ELSE NO RELATED TO THE LEMBU PROJECT?, that was the real issue. It does not matter the investment is profitable or other wise.
We people are not as stupid as what the Dr. may think. The soft loans from the government was from the tax payers and the loans was for that specific project for the benefits of the people. If that Dr. think investment in Bangsar is good investment that was another totally different issue. He should borrow from the commercial banks and not from tax payers.
It was clear that these evil souls have used the fund from the soft loan other then for the LEMBU PROJECT. It was clear that initial intention was not sincere.
We that argument MACC SHOULD open file to investigate from the angle of misused of fund/power.
Do know just from hear say MACC can assemble a team and raided Sri Kembagan assemblyman office in a SWAT style. Interrogate TBH and pressure him till his dead.
but now MACC say no within their boundary?
#16 by Peter on Friday, 18 November 2011 - 11:57 am
To anyone who has a bit of brain, the 70K rent claim by “cowgate” heroine husband is “UNBELIEVABLE” to say the least. However, with stupid cronies with bird’s brain running a 250M poor rakyat money you better believe it.
Of course, It is entirely possible to get RM70k rent.
Company A buys condo with money granted by the government and rents it out to Company B which may well be controlled by the same person(s) at non-market rates.
Of course, Company B is also surviving on a government grant, and with the proper documentation and ‘contracts’ everything, of course, looks legit on the surface. Bolehland at its best.
#17 by boh-liao on Friday, 18 November 2011 - 2:22 pm
Must repect d hubby mah, he got PhD 1 U know, SMART brain in $$ making more $$$ 1
#18 by monsterball on Friday, 18 November 2011 - 3:19 pm
So does Mahathir,
#19 by cseng on Friday, 18 November 2011 - 4:28 pm
Frankly, I think the husband is smart, the condo return is 12.9%. Cow business, how much you can make? 5-6%, why the goverment so stupid, why najib so stupid, 80% of the money should have gone into the condos. la.. brother!
We need to get more smart people like the husband to managed our tax money, he really know where to put them.
Change the National Feedlot Corp to National Funded Condos… He made his point loud and clear… I am smarter than all.
#20 by Loh on Friday, 18 November 2011 - 4:55 pm
///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.///
That precisely is the issue. If the money belongs to Mohamad, they can do what they please, and they have the right to gamble away the money too.
The project is funded by the government for a specific purposes. That purpose is not to buy condo and earn rental or capital gain. Mohamad might claim that the purchase makes economic sense, but that does not change the requirement that the government funds should be used for the intended project. What if the investment incur losses? It is to prevent that possibility that funds intended for specific purposes cannot be used otherwise. Any diversion is misappropriation of the company when the government holds a golden share. Either the government was deceived or the government approved of the change in the utility of government funds.
#21 by limkamput on Friday, 18 November 2011 - 11:10 pm
Making money has never been easier for nincompoop. I can even make the “rental” higher and the yield even more attractive than this PhD. I am going to buy a house the true value is RM1 million. But I am going to ask the seller to sell me at RM2 million. After that, I will ask the seller to pay me back the difference by instalment in ten months. See, my rental income for the first ten month would be 100k minimum. See, I am smarter than this PhD.