Uncollected Rents And A String Of Bad Investments

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KUALA LUMPUR: Mara Inc failed to collect rent totalling RM26.18mil for over a year from three of its tenants, the Public Accounts Committee has found.
According to a PAC report, Premiera Hotel owed the bulk of the outstanding payments at RM22.67mil.
The report also found that Stratecore International Sdn Bhd owed RM1.86mil in rent for M. Mall, a debt that was written off as the tenant did not possess any assets.
Similarly, Malakat Mall Masjid Tanah Sdn Bhd owes RM1.65mil in rent.
The report said all three of Mara Inc’s domestic property investments did not generate the desired returns as of last year.
Menara Mara reported -132% returns for the period between 2013 and 2023, while Living D Sulaiman recorded -415% between 2019 and 2023 and M. Mall saw returns of -2% between 2016 and last year.
The report also found some weaknesses in the manner some properties were handled.
“The issue related to Living D Sulaiman was that the rental agreement for January 2021 to November 2023 does not have detailed information on the furniture and other equipment owned by Mara Inc,” the PAC report said.
As for its foreign property investments, two properties in the United Kingdom have yet to yield returns.
Titiwangsa Inc recorded returns of -246.5% for the period between 2017 and 2023 while Bayswater by Capital recorded -43.3% for the period between 2018 and 2023.
“Only Beaumont House recorded returns of 16.8% between 2014 and last year.
“However, there is a positive outlook for Mara Inc’s properties in Australia. Both the Swanston Street and Dudley International House recorded returns,” the PAC added.
The Swanston Street property recorded returns of 43.2% for the period between 2012 and 2023, while Dudley International House saw 38.7% returns for the period 2013 to 2023.
The PAC recommended that Mara Inc devise a standard operating procedure on property rental so that the issue of outstanding rentals would not arise and become bad debt.
“Mara Inc must also formulate a policy that is clear and complete when it comes to property valuation,” it said.
Any proposal on investments, be it domestic or foreign, must be sanctioned by the Finance Ministry.
“Any decision by the Finance Ministry must be adhered to so as to avoid any recurrence of property purchase scandals,” it said.
The PAC said the Finance Ministry has been informed about the decision related to the conversion of debt of Premiera Hotels & Resorts Sdn Bhd to equity shares.
Therefore, the Parliamentary Select Committee said the Regional and Rural Development Ministry, Mara, Mara Inc and Mara Corp must ensure that Premiera Hotel has a clear plan to ensure that the conversion of debt-to-equity can help generate sustainable returns for the company.
The report was tabled in the Dewan Rakyat yesterday. - Star

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