KUALA LUMPUR (July 4): Mara Incorporated Sdn Bhd (Mara Inc) has accumulated losses totaling RM286.3 million, which the auditor general attributes to the ineffective execution of property management activities.

“Loan arrears from Majlis Amanah Rakyat (Mara) have impacted the company's net current liabilities,” the auditor general said in its report released on Thursday. “As a result, Mara Inc has been unable to pay dividends to shareholders since 2014.”

Mara’s shareholders’ deficit widened to RM115.73 million for 2022 from RM114.06 million in 2021 and and RM66.82 million in 2020 mainly due the impairment of assets related to investments in subsidiary companies, intergroup outstanding balances and trade debtors.

Current liabilities, amounting to RM234.96 million, represent 87% of the group's total liabilities. They comprise bank overdrafts and lease debts, as well as sums owed to Mara, Mara Corp and trade creditors. Loans from Mara alone amounted to RM190.6 million as of 2022, making up 81% of the group's current liabilities.

Mara Inc’s current liabilities consistently exceed current assets, at ratios of between 0.11 and 0.13, with a liquidity ratio of less than one indicating that the group is unable to meet its immediate obligations. The group's total assets only exceeded total liabilities for three years, by RM23.32 million (8.7%) to RM51.62 million (20%).

Meanwhile, Mara Inc’s investments in five subsidiaries resulted in a substantial impairment of RM87.18 million, representing a 54.8% decline in accumulated value. This was primarily due to the company’s net liability position, exacerbated by high intercompany debts that exceed the value of its owned assets.

“Overall, the financial position of Mara Inc's subsidiaries from 2020 to 2022 has been unstable due to deficits in their shareholdings, except for Thrushcross Land Holdings Ltd. As of 2022, Premiera Hotels & Resorts Sdn Bhd recorded the highest deficit at RM81.66 million, followed by Mara Ventures Ltd with RM32.12 million.”

The AG’s report suggested that the Rural Development Ministry and Mara enhance overall monitoring of its subsidiaries' performance, including Mara Corp and Mara Inc.

It also recommended that Mara Inc review its objectives and property management activities to benefit Mara Corp, and to improve the management and monitoring of property management agreements with tenants and operators to safeguard its subsidiaries' interests.