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Then finance minister recommended Felcra to invest RM150 million in unit trust

March 17, 2020

The then finance minister had recommended to then Felcra chairperson Bung Moktar Radin for Felcra to invest RM150 million in unit trust despite its board initially only approving investment of RM50 million, its former board member testified today.

Fifth prosecution witness Habibah Suleiman also claimed that on receiving the recommendation, Bung Moktar (photo) had bypassed Felcra’s board of directors to unilaterally make the decision to invest RM150 million of Felcra’s funds in Public Mutual’s unit trust.

Habibah told the Kuala Lumpur Sessions Court today that Felcra’s board of directors had decided during a board meeting on Nov 24, 2014, which was attended by Bung Moktar also, that Felcra would make a new unit trust investment of RM50 million.

She said that during the Nov 24 2014 meeting, Public Mutual unit trust agent named Norhaili (Ahmad Mokhtar) and her work colleagues were present and they made the presentation for Felcra to invest in the unit trust.

Habibah said that the board in its decision to invest RM50 million in the unit trust, had reminded that Felcra management must get the green light from the Minister of Finance Inc (MoF Inc) first before making any further commitment to investment.

She said that the Felcra board members including herself only got to know that MOF Inc approved RM150 million for unit trust investment when shown the letter from MOF Inc to Bung Moktar dated April 23, 2015.

Habibah said that the letter, signed by then MoF Inc’s government investment company division secretary Mohd Isa Hussain, informed Bung Moktar that the MoF Inc has no opposition to allowing Felcra to invest RM150 million in unit trust, among others.

She said that she did not know that the amount applied for was RM150 million as the Felcra board had only agreed to RM50 million, and that the letter was only shown to her and other board members during a board meeting on June 16, 2015, after the RM150 million investment had already been made in Public Mutual unit trust.

“Members of the (Felcra) board of directors had asked Bung Moktar about the difference in the amount invested in Public Mutual Unit Trust.

“Bung Moktar had said that he had met with the Finance Minister (I am not sure which finance minister that he meant) by bringing Felcra’s application letter to obtain the green light and Bung Moktar had told the board members that the Finance Minister had recommended to him (Bung Moktar) to invest RM150 million in Public Mutual Berhad unit trust.

“I assumed that he had changed the amount from RM50 million to RM150 million after the recommendation was made to him,” Habibah said.

“The act of investing RM150 million in the Public Mutual Berhad unit trust was an action and decision of Bung Moktar himself because Felcra Berhad’s board was never informed about the approval for the investment given by the MoF Inc before the act of investing was made by Felcra Berhad.

“The board members were only informed about the approval by MoF Inc after the investment was made in the Public Mutual Berhad unit trust, which was during the board meeting on June 15, 2015,” Habibah said through her 21-page witness statement today.

The witness statement was tendered by the prosecution during the corruption trial of the Kinabatangan MP and his wife Zizie Izette A Samad (photo) before Sessions Court judge Rozina Ayob this afternoon.

Habibah noted that based on the minutes of the June 16 2015 Felcra board meeting among others, discussed MOf Inc’s approval dated April 23, that same year, for the RM150 million Felcra investment in Public Mutual unit trust.

She said the board also agreed for the need of management to monitor the investment as the investment’s net asset value had decreased from RM150 million to RM142 million on June 16, 2015, and that the board decided to hold on to the investment as it is a long term investment.

“In that meeting, Bung Moktar had explained that the change in investment amount was made on the recommendation of the Finance Minister at MoF,” she said.

Habibah testified that the MOF Inc letter green-lighting the RM150 million Felcra investment in Public Mutual unit trust was never informed to Felcra’s board before the investment was made, and that the board must be informed first before such investment was even to be made.

“The act of investing RM150 million in the Public Mutual Berhad unit trust was an action and decision of Bung Moktar himself because Felcra Berhad’s board was never informed about the approval for the investment given by the MoF Inc before the act of investing was made by Felcra Berhad.

“The board members were only informed about the approval by MoF Inc after the investment was made in the Public Mutual Berhad unit trust, which was during the board meeting on June 15, 2015,” Habibah said.

The prosecution is expected to continue their examination-in-chief when proceedings resume tomorrow morning, and after that the defence will get the chance to cross-examine Habibah.

At the end of proceedings this afternoon, Bung Moktar and Zizie’s lawyer K Kumaraendran asked whether trial will still commence tomorrow due to the high possibility that the government may announce a nationwide lockdown today due to the Covid-19 pandemic.

Rozina replied that as of now, the trial will still resume tomorrow pending any new directives from the court registrar linked to any such possible lockdown announcement by the government.

According to the first charge, Bung Moktar is accused of taking an RM2.2 million bribe from Public Mutual investment agent Madhi Abdul Hamid, 38, through Zizie.

He was accused of committing the offence as an inducement to obtain the Finance Minister’s (II) approval for Felcra to invest RM150 million in Public Mutual unit trust.

He purportedly committed the offence at Public Bank’s Taman Melawati branch at Jalan Bandar 12, Taman Melawati, Kuala Lumpur, between 12.30 pm and 5 pm on June 12, 2015.

In relation to the second charge, Bung Moktar was accused of receiving RM262,500 in bribes from Madhi, through Public Islamic Treasures Growth Fund account number 044797816 registered under Zizie’s name.

Bung Moktar also faced a third charge of obtaining a RM337,500 bribe from Public Mutual investment agent, Norhaili Ahmad Mokhtar, 42, via Public Ittikal Sequel Fund account number 044797824 registered under Zizie’s name.

Both offences were allegedly perpetrated at the same location at 12.16 pm and 12.28 pm on June 19, 2015.

The three charges were framed under Subsection 17(a) of the MACC Act, and Section 24 (1) of the Act specifies penalties of jail term of up to 20 years, fine of at least five times the bribe amount or RM10,000, whichever is higher, if convicted.

Zizie is also on trial over three counts of abetting Bung Moktar in committing the offences.

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