Investment In Property Provide High And Stable Returns-NFC
Nov 22, 2011
GEMAS, Nov 17 (Bernama) -- The National Feedlot Corporation (NFC) has devised its own strategic financial planning which includes strategic investments in property it anticipates will give the company high and stable returns.
Its executive chairman, Datuk Sri Dr Mohamad Salleh Ismail in answering allegations by PKR which questioned the company's acquisition of condominium units in Bangsar, said the purchase of two units at the One Menerung condominium amounting RM6.9 million each was a commercial decision to hedge unutilised funds for an abattoir project, which was delayed but not at the fault of the NFC.
"We can put it in fixed deposit but face loss of value because our inflation is higher. While waiting for the project to start, we needed to find a place where we could park the money short for term, avoid depreciation and make profits almost yearly," he told a press conference here, Thursday.
Mohammad Salleh said ideally, leaving the funds in fixed deposits would be less controversial but would not give the company the necessary yield from funds of this size.
NFC corporate and financial consultant, Zakaria Mohammad said the group received about RM700,000 rebate per unit for two years from the developers and they also made arrangement for NFC for the rental of the units with a guaranteed yield at about RM200,000 per year.
NFC would make about RM3.6 million from both units for the first two years which are 2010 and 2011, all of which would be credited to the NFC group, he said.
Mohammad Salleh said the purpose of the loan given to NFC was undoubtly for cattle farming and infrastructure.
Therefore, although buying condos was a departure from the purpose of the loan, the properties were still kept in the name and books of the company.
It was a matter of converting the property back into cash at the desired profit and there was neither unjust enrichment nor dishonesty of any private individuals, he added
-- BERNAMA
