Friday, March 16, 2012

NFCorp Directors Took Out Cash

Global Biofuture Pte Ltd is another company set up by the Directors of National Feedlot Corporation (NFCorp) in Singapore in December 2008.  The Directors of the company are family members of Datuk Ser Shahrizat Jalil - Datuk Seri Mohamad Salleh Ismail, Wan Shahinur Izran Mohamad Salleh and Wan Izzana Fatimah Zabedah Mohamad Salleh.  Together with Wan Shahinur Izmir Mohamad Salleh (who is not a Director), they are shareholders of the company with 60,000 shares each, except for Izzana who owns 20,000 shares of S$1 each.

Based on the latest audited accounts available from the Singapore Accounting and Corporate Regulatory Authority (ACRA) dated 31 December 2010, it is stated that the Directors owes the company the sum of S$4,975,415 (RM11.98 million).  In addition, the sole shareholder who is not a director also owes the company the amount of S$60,000 (RM144,000) (page 24 under “8. Other Receivables”

In previous exposes, we have accused NFCorp Directors of abusing the RM250 million soft loan to NFCorp for the purposes of rearing cattles to acquire luxury properties in Malaysia and Singapore.  The Directors have defended the move claiming that “it was deemed more astute business to invest in property in the short-term rather than just placing NFCorp monies in money market instruments”.

We have also accused the Directors of abusing the NFCorp loan to invest in unrelated businesses contrary to the purpose specified in the loan agreement, such as in restaurants and supermarkets in Singapore.  However, the Directors have defended the moves as a means of marketing and promotion of their beef products (even if it did not really make business sense).

As weak as the defense of the above abuses – acquisition of properties and investment in unauthorised businesses – at least they were plausible excuses.  However, there can be no defense at all to the fact that the Directors have withdrawn a sum of nearly RM12 million directly from Global Biofuture Pte Ltd.

The Audited Accounts also states that Global Biofuture owes a sum of S$7,935,877 (RM19.1 million) to other companies related to the Directors of the company (page 20 under “10. Other Payables”.  Therefore, we have strong reasons to believe that Global Biofuture is part the Shahrizat family group of companies – including National Meat and Livestock Sdn Bhd, Real Food Company Sdn Bhd, Meatworks (Singapore) Pte Ltd – all of which sources its funds from the RM250 million loan provided by the Malaysian government.

The transfer of monies to the respective directors are clear cut criminal breach of trust and misappropriation of public funds meant for specific purposes which must be investigated thoroughly by the Royal Malaysian Police and Anti-Corruption Commission (MACC).  The Attorney-General must not hesitate to prosecute the directors of NFCorp for such blatant in-your-face abuses.

At the same time, Section 162 of the Singapore Companies Act “prohibits loans from a company to a director of a company”.  Even if in the event a company wishes to extend a loan to a director under approved exceptional circumstances, the “approval of the company must be obtained at a general meeting at which the purposes of the expenditure and the amount of the loan or the extent of the guarantee or security, as the case may be, are disclosed”.s

The audited accounts of the company as well as searches with ACRA have revealed absolutely no evidence of any such approval under these permitted exceptional circumstances have been obtained.

The mystery of Global Biofuture deepens when the specified principal activity of the company is “trading in food and fuel” which is quite different from that of rearing cattle.  The audited accounts showed that the company was able to generate sales of S$2.94 million in the 6 months from July 2010 to December 2010 (page 7).  However, it was noted that out of the sales revenue, S$2.87 million or 97.6% of the sales were made to a company related to the directors (page 22 under “5. Related Party Transactions”).  The question hence arises as to why the Directors are setting up a company to essentially sell to themselves?

The fact that “there are no key management personnel apart from the company's directors” (page 28) raises the suspicion that the company is acting purely as a vehicle to personally profit from sales of goods sold to other companies in the family’s group of companies, or for the evasion of tax.

The extent of chicanery in Shahrizat family’s group of companies continues to shock and amaze me, and I am sure all Malaysians.  The Government, represented by the Ministry of Agriculture and the Ministry of Finance, the Attorney-General, the Royal Malaysian Police as well as MACC must leave no stone unturned in the efforts to bring the guilty parties to book and ensure that every sen of tax-payers’ funds be recoverable.
Post a Comment