Mara Inc’s inefficient implementation led to accumulated losses of RM286.3mil, says AG’s Report

PETALING JAYA: Four government-owned companies, including Mara Incorporated Sdn Bhd (Mara Inc), have been flagged for their unstable financial positions due to inefficient business activities, according to the Auditor-General’s Report 2/2024.

The other three companies identified are Mass Rapid Transit Corporation Sdn Bhd, International Islamic University Malaysia, and i2M Ventures Sdn Bhd.

“The inefficient implementation of activities of Mara Inc has resulted in accumulated losses of RM286.3mil.

“Delays in loans arrears from Majlis Amanah Rakyat (Mara) have also impacted the net current liability position of the company.

“These conditions have rendered Mara Inc unable to pay dividends to shareholders since 2014,” it said in the report, which was released on Thursday (July 4).

The other three companies identified are Mass Rapid Transit Corporation Sdn Bhd, International Islamic University Malaysia, and i2M Ventures Sdn Bhd.

The report also found that only RM2.88mil in dividends was paid by Mara Inc to Mara in 2012 and 2013.

In response to the Auditor-General, Mara Inc said that the drop of earnings in 2011 was due to the movement control order while the increase in earnings in 2022 was due to the return of its operation as usual.

“The Covid-19 pandemic has left a serious impact on hotel and student lodging industry players and directly impacted the financial flow of the company as well as an indirect impact on the increase in shareholders’ deficit.

“The cash flow position in 2023 is also higher compared to 2022,” said Mara Inc.

Mara Inc’s portfolio includes three local properties and six overseas – four in the UK and two in Australia.

It reported an equity deficit of RM115.73mil, with current liabilities standing at RM234.96mil.

Property operations management is inefficient due to incomplete document submissions related to properties.

Five out of nine of its own corporate governance elements were not fully practiced, said the report.

The report urged the Rural and Regional Development Ministry and Mara to increase the monitoring of its subsidiaries such as Mara Corp and Mara Inc.