Does Felda possess expertise to run foreign hotels?

Question

Accepted Answer

Felda's Expertise in Operating Foreign Hotels is Questioned Amidst London Property Investment

DAP's Lim Guan Eng has raised significant concerns regarding Felda's capacity to manage a hotel in London, citing the RM500 million investment into the Grand Plaza Serviced Apartments. He questioned the rationale behind paying RM100 million above the property's actual valuation and highlighted Felda's lack of prior experience in operating hotels in foreign jurisdictions. In contrast, Felda chairman Tan Sri Isa Samad asserted that the agency's existing portfolio of eight hotels provides sufficient experience for its international ventures.
Concerns Over London Hotel Acquisition Price and Experience

Lim Guan Eng specifically pointed out that Felda's subsidiary, FIC UK Properties, acquired the Grand Plaza Serviced Apartments for £98 million (approximately RM501 million). He contrasted this with valuations from real estate agents Savills and Knight Frank, which reportedly placed the property's worth at £80 million (RM408 million) in March of the same year. Lim questioned the substantial 25% price increase in a matter of months, suggesting potential overpayment and questioning the transparency of the transaction. Furthermore, he emphasized that Felda's operational experience has been primarily domestic, and managing a hotel in a competitive international market like London presents a different set of challenges.
Felda Chairman Cites Existing Hotel Portfolio as Experience

Tan Sri Isa Samad, the chairman of Felda, countered these criticisms by stating that the agency's involvement in owning and operating eight other hotels has equipped it with adequate experience. He suggested that this track record demonstrates Felda's capability to navigate the hospitality sector, even in international markets. Samad dismissed concerns about risking taxpayers' money, framing the investment in the London property as a strategic business decision aimed at generating profits. This perspective frames Felda's diversification into international property as a natural extension of its existing business operations.
Focus on Competency and Accountability

Lim Guan Eng clarified that his concerns were not based on racial prejudice but rather on principles of competency and accountability in the management of public funds. He argued that questioning the financial prudence and operational readiness of Felda's investment in London is a matter of ensuring value for money and responsible stewardship of resources. The DAP leader drew a parallel with the Penang state government's approach to divesting unprofitable businesses, suggesting that a focus on financial performance and strategic divestment is a sound management practice that should be applied universally, regardless of the organization's background.

Reading history

Hide →

This history is cleared when the page is closed.

Does Felda possess expertise to run foreign hotels?

Loading

Was this article helpful?

Helpful

Not helpful

Report an issue

1

0

0

Share with friends