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Tuesday, July 9, 2013

Malaysia-Japan venture to run NFC, but not take its RM250 million debt


The scandal-ridden National Feedlot Centre (NFC) cattle farm will be managed by a Malaysian-Japanese venture, which is sourcing its own funds rather than take over the project's RM250 million soft loan given in 2008.
The Malaysian Insider understands that Kirimitonas Agro Sdn Bhd has received all approvals to run the cattle farm in Gemas, Negri Sembilan, as several banks are willing to fund the project that was first awarded to Wanita Umno chief Datuk Seri Shahrizat Jalil's family.
"It is commercially viable and the joint-venture partners have a track record in the industry," an industry source told The Malaysian Insider.
Kirimitonas Agro is helmed by Datuk Nik Mohd Amin Majid, a former banker who is seen as an enterpreneur with the right connections in Malaysia's corporate world. His partner is Hannan Foods Group (HFG), Japan's largest meat and second largest food company.
The joint-venture signed a letter of intent with the Ministry of Finance last April for the project, with six months given for due diligence and to get approvals and funds.
The company is a 60/40 joint venture between Nik Mohd Amin's Otoshitos Sdn Bhd and Aruk Mert Co. Ltd, a HFG associate company that is expanding the group's halal business.
Kirimitonas is expected to focus on halal wagyu, the prized marbled beef that is popular in Japan and now across the world as rising incomes push people to consume better quality meat.
In its plans unveiled last April, Kirimitonas would have three more abattoirs to cover the northern, southern, western and eastern regions apart from existing facilities in the farm.
The company also planned to have feed mills and downstream activities such as halal gelatin and cosmetics, possibly involving other partners.
It also expressed confidence of reaching the target of 250,000 heads of cattle in the farm after five years of operations. Malaysia's live cattle population is now at some 900,000 heads but it imports some 75 per cent of its needs due to rising consumption.
"It is a done deal but Kirimitonas Agro won't take over the soft loan as that was given to National Feedlot Corporation (NFCorp)," another source confirmed, adding that Putrajaya will seek to recover the loan through litigation.
Nik Mohd Amin was quoted last April as saying the joint-venture will pay back the remainder of the RM216 million soft loan for the project but sources say bank loans will be used to run the cattle farm as the government loan was under NFCorp.
The loan was given to NFCorp, which was owned by Shahrizat's husband Datuk Seri Dr Mohamad Salleh Ismail and their three children, as the then Abdullah administration pushed for Malaysia's food security with beef seen as a strategic commodity.
The project's financial viability came to question when the 2011 Auditor-General's Report indicated several delays were affecting the progress in the 1,500-hectare farm which was fully operational although there were not enough cattle being raised for optimum production.
Opposition lawmakers latched on the audit report and made revelations that were denied by the company. Prime Minister Datuk Seri Najib Razak then announced in January 2012 that NFCorp's assets have been frozen while the Malaysian Anti-Corruption Commission (MACC) investigated alleged financial abuse in the company.
The police and MACC investigations centred on possible criminal breach of trust following allegations that at least RM27 million in project funds were used to purchase land and property in Singapore and Kazakhstan unrelated to cattle farming.
On March 12, 2012, Dr Mohamad Salleh claimed trial to dishonestly misusing funds amounting to RM9,758,140 through four cheques to partly finance the purchase of two units of One Menerung Condominium in Block B in Kuala Lumpur's upscale Bangsar, for the National Meat and Livestock Corporation Sdn Bhd, which he owns with one of his sons.
One of the sons recently married a Kazakhstan bride in Kuala Lumpur.
The scandal also cost Shahrizat her job as the Woman and Family Development Minister by end March 2012 as Najib did not renew her senatorship. She did not contest in Election 2013 but remains Wanita Umno chief. 

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