KUALA LUMPUR: National Feedlot Corporation Sdn Bhd (NFCorp) executive chairman, Datuk Seri Dr Mohamad Salleh Ismail told the High Court here today, that the National Feedlot Centre (NFC) is a viable and a good project because it involves national food security issue.

Mohamad Salleh, 74, however said the supply and production of beef by NFCorp was halted when the government suspended the project since May 2009.

"If the government adhered by Schedule 8 of the implementation agreement, which was to construct an Export Quality Abattoir (EQA) for this project, the project would have been successful.

"From the perspective of NFCorp, had the government executed what was agreed in Schedule 8 of the implementation agreement of this project, this project could take off. However, there was no abattoir built at that time," said Tan Sri Shahrizat Abdul Jalil's husband.

He also added that the implementation agreement has not yet terminated by the government.


Mohamad Salleh said this when re-examined by his counsel Datuk K. Kirubakaran at the hearing of the government's suit against NFCorp to recover RM253.6 million in loan repayment and interest from the company over the National Feedlot Centre project in Gemas.

Asked by his counsel over the failure to pay back RM253.6 million loan to the government, Mohamad Salleh said he unable to pay the said loan as there is no production of the beef.

Mohamad Salleh who is the second defendant, however said NFCorp had not breached the loan agreement due to failure to pay the first instalment in 2012 as scheduled.

"My Lord, it is true as stated in the scheduled we have to pay the loan after a three-year period in 2012.

"However, its depend on the production of the beef. Without the production of the beef, we were not able to pay the loan and we actually wrote to the government asking for deferment of the payment," he added.


Under the loan agreement, NFCorp was supposed to repay RM17 million annually from 2012 to 2028.

Asked by judge Anand Ponnudurai why NFCorp did not built the EQA if the government failed to build it, Mohd Salleh said, "The cost is about RM60 million which we don't have".

In its suit, the government named the NFCorp as the first defendant, while Mohamad Salleh and their three children, Wan Shahinur Izran, Wan Shahinur Izmir and Wan Izzana Fatimah Zabedah, as the second to fifth defendants, respectively.

The government claimed that it had signed a loan agreement on a total of RM250 million with NFCorp on Dec 6, 2007, to finance the costs of establishing and operating the National Feedlot Centre in Gemas as part of its policy to develop and increase beef production.

The loan was disbursed in three tranches and Mohamad Salleh's family was claimed to have made 10 withdrawals amounting to RM18.51 million from Jan 24, 2008, to Jan 3, 2011.

The hearing continues on March 15 next year.

-- BERNAMA