Loan agreement shows NFCorp broke terms, says Pua

By Yow Hong Chieh
The Malaysian Insider
Feb 25, 2012

KUALA LUMPUR, Feb 25 — DAP MP Tony Pua today revealed the loan agreement signed by the National Feedlot Corporation (NFCorp), which he claimed proved the company had violated conditions attached to the RM250 million facility.

The DAP publicity chief pointed out that Clause 3 of the agreement clearly states that the federal loan should be used to “part finance the project as described in the First Schedule of this agreement”.

The First Schedule states that use of the loan must be “consistent with the government of Malaysia’s policy of developing, promoting and nurturing the production of beef and beef products through the National Feedlot Centre as a centre for commercial and integrated cattle feedlot”.

“It cannot be more obvious. Use of the funds can only strictly be used to part finance the setting up of the centre and nothing else,” Pua told reporters at DAP headquarters here.

“So all the claims made by the executives and directors of NFCorp that they can use the money for anything is complete rubbish.”

He added that this point was reinforced by Clause 18.1(b), which states that as long as the loan is in existence, NFCorp must use the borrowed monies “for the purpose as stated in Clause 3 of this agreement”.

Pua also took to task the Agriculture and Agro-Based Industry Ministry for allowing NFCorp to draw down on the special loan account, noting that such requests have to be accompanied by a progress report from the company.

The progress report must be signed off by an authorised technical committee chaired by an official from the ministry, according to the agreement.

“They have to sign the progress report. So the fact that the drawdown has taken place despite the fact that NFC has failed to meet its targets… (shows that) the Ministry of Agriculture is equally culpable for the mess,” he said.

NFCorp must also provide monthly bank statements to the Finance Ministry on a quarterly basis with a statement setting out how the loan monies were used, Pua said, and questioned why the ministry allowed the loan to continue.

“Unless NFCorp submitted false reports. Then that would be definitely criminal. Now, we don’t know if they submitted false reports at this point in time.

“It is the Ministry of Finance that has to verify the contents of those reports,” he said, adding that the ministry official who briefed the Public Accounts Committee (PAC) on NFCorp stated that no mention of property purchases had been made in any report.

The Petaling Jaya Utara MP also asked why the ministry has not frozen the loan as Clause 4 of the agreement states that repayment shall begin three years after the first drawdown, which took place in January 2008.

“We are now in February 2012. Our understanding is that they have not made a single sen in repayment. We are way past the three-year grace period,” he said.

“Why is it they have not paid? Why is it the Ministry of Finance has not taken action on the late payment? And why has the loan not been terminated or put into default status?”

The publicly-funded NFCorp hit national headlines following the Auditor-General’s Report last year and has continued to hog the limelight after it was linked to federal minister Datuk Seri Shahrizat Jalil’s family.

PKR has made several claims of abuse over NFCorp’s federal loan involving over RM62 million spent on land, property and expenses unrelated to cattle-raising.

Shahrizat’s son and NFCorp executive Wan Shahinur Izmir Salleh has insisted that the company had made better use of the money by investing in property during a break in business operations after Putrajaya’s decision to suspend construction of an abattoir that would have been rented to the company.

Deputy Prime Minister Tan Sri Muhyiddin Yassin announced last month that Putrajaya would appoint an auditor to scrutinise NFCorp’s books in light of accusations made against the company but dismissed calls for a royal commission of inquiry into the issue.

  1. #1 by k1980 on Saturday, 25 February 2012 - 2:47 pm

    //..the agreement states that repayment shall begin three years after the first drawdown, which took place in January 2008.

    “We are now in February 2012. Our understanding is that they have not made a single sen in repayment. We are way past the three-year grace period,” he said.

    “Why is it they have not paid? Why is it the Ministry of Finance has not taken action on the late payment? And why has the loan not been terminated or put into default status?”//

    Shahreezuk: “No need to pay on lah. We just declare ourselves pokkai. The RM350 million we already deposit in Swiss banks. Cheerio….see you all in Hawaii”

  2. #2 by Bigjoe on Saturday, 25 February 2012 - 3:04 pm

    All of them were lying all this time- Shahrizat family, Muhiyiddin, Noh, MACC, the police, the Auditor General and even Najib – Every single one of them lied through their teeth..

    Europlus, Kidex, FGV, defense contracts etc, the list are a mile long – all lies..Only way to get to the truth is PR in Putrajaya.

  3. #3 by k1980 on Saturday, 25 February 2012 - 3:19 pm

    Why haven’t they made a single sen in repayment?

    A. Hey, dude, it’s Ah Kong’s money.
    B. Their cows have run away with the RM350 million
    C. umnoputras are not required to repay loans
    D. Ah Long Sick need not repay his RM12.5 billion, so …

  4. #4 by Tango on Saturday, 25 February 2012 - 3:34 pm

    Sorry YB Pua, don’t u know that I don’t understand contracts? I’m inexperienced in the cow biz, just a young CEO that papa n mama agreed should earn 35k salary, and by the way mama didn’t know a thing about the govt contract terms cos its only a quarter billion ringgit and we family never even discussed about it. I didn’t know I have to use only for cow biz, cannot buy car, properties and i Thot all can use personal names to register also one. Last time got a ex Chief Minister tell same story to Australian Court that “I no understand” cos dunno how to read English the court let him go one. I think in Malaysia the court can also do same la, as long as mama stays in power she can help out. Please let my mama stay in power ok?

  5. #5 by Godfather on Saturday, 25 February 2012 - 3:43 pm

    In Manila:

    Philippine President Benigno Aquino said yesterday he had ordered an investigation into allegations that the country’s gaming regulator took illegal gifts from a Japanese casino tycoon. PAGCOR chairman Naguiat will appear before a cabinet level committee and be punished if found guilty of wrongdoing. The amount involved was said to be US$110,000.

    In Hong Kong:

    Chief Executive Donald Tsang was asked by legislators to explain about favours he received from tycoon friends. Tsang had admitted to taking a trip on a friend’s private jet to Phuket and went to Macau on a luxury yacht. Cost of the trips ? Less than HK$50,000.

    Also, Henry Tang, a contender for Hong Kong’s Chief Executive post, was urged to quit the race because he built a basement under his bungalow without planning permission.

    Meanwhile, in Kuala Lumpur:

    1. Tajuddin Ramli apparently let off the hook for a RM 580 million judgment.

    2. Mahathir claims that it was necessary to spend RM 1.8 billion to buy back MAS shares from Tajuddin Ramli because of “National interest”.

    3. Tony Pua provides evidence that the NFC RM 250 million scandal was perpetrated by a minister’s family through non-observance of loan covenants.

    Are we the basket case of Asia or what ?

  6. #6 by sotong on Saturday, 25 February 2012 - 4:50 pm

    Getting a project approved is important, its failure with taxpayers’ money is not…….as there will always be benefit for some, directly or indirectly!

  7. #7 by negarawan on Saturday, 25 February 2012 - 5:03 pm

    In China, Sarizat and Mamakthir would have been sentenced to death…..

  8. #8 by Jeffrey on Saturday, 25 February 2012 - 7:04 pm

    So borrower NF Corp breaches loan terms. That itself is not as shocking as why the govt. did not monitor its adherence to loan terms and utilisation of loan, and why if even after failing this first duty to check and monitor the loan utilisation, govt leaders came out to defend NF Corp’s position (instead of pulling back/recalling the soft loan) before checking! This is a soft loan – not a grant and requires an explanation why it is treated as if it were a grant! Whilst the wrong utilisation of loan by NF Corp is blameworthy, the major blame rests with authorities who have failed in their duty of care in giving such a loan from public coffers, and after giving it, is equally as lackadaisical in monitoring what happened to it after disbursement….What’s the explanation for this?

  9. #9 by jus legitimum on Saturday, 25 February 2012 - 10:32 pm

    Two days ago,in Kuching 3800 persons had to scramble and squeeze their way before they could receive the one off RM500.Some old folks fainted and some women even complained they were molested.So now the question is do people have to be treated this way if the government is prudent and accountable in managing public funds?I am sure a good government can give more than RM500 every year to every citizen.

  10. #10 by negarawan on Saturday, 25 February 2012 - 10:43 pm

    Just hours after Tony Pua made public the actual loan agreement between NFC and the BN government, the police is pressured to press charges against NFC. This clearly shows that the police and MACC have been dragging their feet on NFC under UMNO instruction. The PDRM and MACC are merely UMNO puppets and shame on them!

  11. #11 by cseng on Saturday, 25 February 2012 - 11:44 pm

    Fact are not important at all for these people, what they need is some air-time thru TV3 that potentially yield them some votes.

    Accountability is the last word they ever understand and practise.

  12. #12 by Bigjoe on Sunday, 26 February 2012 - 8:25 am

    Don’t forget, if there is CBT charge for the directors, then there is also a case of BRIBERY OF POLICE by them which carries a sentence of up to 20yrs..

  13. #13 by SENGLANG on Sunday, 26 February 2012 - 10:03 am

    It was very simple any loan agreement must always contain the clause under “PURPOSE” meaning the purpose of the loan. Some go for right issue etc, where the purpose of the fund raised is very specifically mentioned. If the fund or loan used other than that any way with legal back ground will know it has breach the term or condition.

    But it was very strange it need months to come to a such a conclusion. It need a lot of time to investigate for one reason or other when thing happen like that.

    Can you imagine for less than few thousand this poor TBH was subject to non stop interrogation as time was an essence, why for millions they see no urgency. Some more they feel fit to shake hand and take photo for all to see.

  14. #14 by monsterball on Sunday, 26 February 2012 - 12:11 pm

    Sooooo simple…loans are for buying cows and not condominiums.
    Why is MACC not arresting the big crooks?
    Keep questioning…investigating…waiting for instructions from Najib?
    Who are you working for?

  15. #15 by Winston on Sunday, 26 February 2012 - 12:49 pm

    Jeffrey, remember the famous one-liner?
    “Which UMNO leader doesn’t have problems?”
    Looks like it’s all part of the works-in-progress!
    And it’s a very pleasant problem indeed!!
    So, everyone in that party will have his/her turn?
    What do they take Malaysian taxpayers for?
    Cash cows?

  16. #16 by mickeytiger2006 on Sunday, 26 February 2012 - 1:31 pm

    For mamathir, 350m is peanut compare to 1.8b loss by mas. This monkey is eating peanuts like no people business everday!

  17. #17 by Jeffrey on Sunday, 26 February 2012 - 3:34 pm

    It is the one liner that inadvertently gives away most: besides “Which UMNO leader doesn’t have problems?”, the other notable one liner is “My husband has no ambition to be PM” – Baginda’s wife Mazlinda at the time he first came for trial in 2007.

  18. #18 by SENGLANG on Sunday, 26 February 2012 - 4:11 pm


    Yes vote BN candidates to ensure victory in corruption, abuse power, more bail up, more NFC are coming the way…

    pls continue to vote for BN ……..

  19. #19 by Loh on Sunday, 26 February 2012 - 6:17 pm

    ///He (Najib) added that prosecutions cannot be decided upon indiscriminately as the case must first satisfy legal provisions before it is brought to court “We cannot make the assumption that all investigations end with prosecution ” he said CCID director Datuk Syed Ismail Syed Azizan yesterday confirmed that the police would recommend that the Attorney-General’s Chambers charge NFCorp’s directors with CBT.///–MalaysianInsider

    Did Najib say all that to explain the work of the AG’s office, as if he cares that the people do not know the law, or does he tell the AG office what he prefers, i.e. send the paper back to the police to further investigate until cows come home?

  20. #20 by Loh on Sunday, 26 February 2012 - 6:24 pm

    ///The DAP publicity chief pointed out that Clause 3 of the agreement clearly states that the federal loan should be used to “part finance the project as described in the First Schedule of this agreement”.///–the author

    What is the meaning of the words “part finance” here? Does it mean that if the project costs 10 ringgit, only 10 ringgit minus a cent could be drawn down to finance the project. Or does it mean that only a part of the loan is for the project and the remaining could be used to earn more income, in the words of Khairy the son-in-law?

  21. #21 by waterfrontcoolie on Sunday, 26 February 2012 - 6:33 pm

    What is the PM babbling about further investigation into the NFC? The Police had already concluded that they have broken the rules under CBT, and he still asked the AG to look into it? What kind of fairy tale is he trying to spin? Who is in charge? I thought the AG should only concentrate on the details of presecution? There is no doubt that the end of BN must come!

You must be logged in to post a comment.