PAC flags serious governance weaknesses in Felcra oil palm estate buys
03/03/2026 (The Malaysian Reserve) - THE Public Accounts Committee (PAC) has tabled its report on the Federal Land Consolidation and Rehabilitation Authority’s (Felcra) procurement of oil palm estates under the Rural and Regional Development Ministry (KKDW), citing serious irregularities and governance weaknesses.
PAC chair Datuk Mas Ermieyati Samsudin said the committee began proceedings on the issue on Aug 21, 2025, based on findings in the Auditor-General’s Report (LKAN) 2/2025.
“Based on the report, it was found that there were serious irregularities and governance weaknesses in the procurement process, price evaluation and palm oil yields, as well as compliance with the contract agreement, for the acquisition of four oil palm estates,” she said in Dewan Rakyat today.
The estates includes Estet Telupid in Sandakan, Sabah, and Estet Dabong, Estet Sg. Rawit 2 and Estet Aring in Gua Musang, Kelantan.
She said PAC held nine proceedings meetings from Aug 21, 2025 to Nov 3, 2025 to examine the matter.
Witnesses who gave evidence included KKDW’s secretary-general, Felcra’s chairman, board members and senior management.
PAC’s findings said Felcra’s board approved the acquisition of four estates from 33 offers to meet a 30,000-hectare target under Felcra’s transformation and strategic roadmap, with the purchases financed fully using Felcra’s internal funds.
It said the decision was made based only on internal studies, with no external due diligence carried out despite a board decision to do so.
PAC also cited governance weaknesses raised in the LKAN on the estate purchases, including rushed execution of agreements within seven to 12 days after board approval and irregular meeting records.
It said KKDW’s oversight of Felcra was limited to monitoring development projects funded under development expenditure and attendance by ministry representatives at board meetings.
Among the committee’s recommendations, Felcra was told to recalculate a more realistic return-on-investment (ROI) projection using more appropriate methods and taking into account all relevant costs.
“Felcra needs to ensure that the rehabilitation programme for less viable estates is continued and expanded, with a tighter performance monitoring plan based on clear KPIs.
“This is to ensure that the investments made generate good returns as targeted and directly contribute to the company’s profits,” Mas Ermieyati said.
The committee also called for a medium-to long-term strategy to reduce reliance on foreign labour through comprehensive mechanisation.
It said KKDW and Felcra should reassess and reset more realistic land-bank acquisition targets based on Felcra’s financial capacity, and for the Finance Ministry and KKDW to strengthen Felcra’s board by appointing external members with diverse expertise.