Deputy minister: Government reviewing sale of loss-making TH Plantation subsidiaries

KUALA LUMPUR, July 22 ― The government was reviewing the sales of two TH Plantation Bhd subsidiaries to a non-Bumiputera private company, a transaction executed by its predecessor as part of a rationalisation plan to recoup losses.

Deputy Minister in the Prime Minister’s Department Ahmad Marzuk Shaary told Parliament’s Lower House during Question Time this morning that the Economic Planning Unit was scrutinising the RM170 million deal, with the view to cancel it.

The transaction would have involved the disposal of 6,513.9 hectares of oil palm plantation in Bintulu and Sibu in Sarawak to Tamaco Plantation Sdn Bhd, a company whose directors according to the deputy minister are mostly non-Malays.

“For the information of the honourable members of the lower house, the company Tamaco is a non-Bumiputera company,” he said in a reply to a question posed by Datuk Seri Noh Omar, the Umno MP for Tanjung Karang.

“The EPU is in the midst of reviewing if the sales of shares in Bumi Suria Ventures Sdn Bhd and Maju Warisan Sdn Bhd were or were not at market value, or if it will have an impact on the long-term plan to improve TH Plantation.”

TH Plantation Bhd put on sale all of its shares in Bumi Suria Ventures Sdn Bhd and Maju Warisan Sdn Bhd in December last year due to financial constraints.

The subsidiary of Lembaga Tabung Haji, a Muslim pilgrimage fund, said in a statement that both the companies were underperforming, and that it had to consistently inject funds to keep them afloat.

TH Plantation had acquired the companies at a cost of RM264.2 million in 2013, the New Straits Times reported.

The then Pakatan Harapan government, which oversaw the sales, said the acquisition was far above market value considering the actual plantable area of the land the two companies owned were far lower than projected.

The sale had since become the epicentre of an ethno-religious polemic between PH and its detractors, who claimed corruption in the shares disposal.

Umno, now back in power as part of the newly-formed Perikatan Nasional bloc, alleged both the companies were sold at below market value to a company owned by Chinese owners.

Datuk Seri Mujahid Yusof Rawa, the former minister in the prime minister department in charge of religious affairs, has repeatedly denied the allegation.

During Question Time this morning, the Parit Buntar MP accused Ahmad Marzuk of dishonesty, saying the deputy minister from PAS had intentionally omitted the fact that TH Plantation was racking up billions of ringgit in debt, forcing it to shed many underperforming assets.

“I have information here that TH Plantation was RM1.2 billion in debt...the deputy minister did not mention this and his statement is misleading,” he said.

TH Plantations’ group outstanding borrowing was RM1.2 billion with trade and other payables at RM202.7 million as of December 2018.

The company incurred losses of RM658.4 million last year, mainly due to impairment of assets arising from high cost of investments in the past.