Dr M: Settlers have no cash to expand FELDA

By Shannon Teoh

February 23, 2012

KUALA LUMPUR, Feb 23 — Tun Dr Mahathir Mohamad today defended the planned listing of FELDA Global Ventures Holdings (FGVH) as a “great opportunity” for FELDA to expand.

Former Finance Minister Tengku Razaleigh Hamzah criticised the move yesterday, saying it would expose land belonging to 200,000 smallholders to the open market.

But former Prime Minister Dr Mahathir(picture) disagreed with his old rival, saying “the settlers themselves cannot afford to buy shares and expand the company.”

“I am quite sure (the government) will make sure there is some reserve as to the ownership of shares but the opportunity offered by listing is so great as they can expand their business.

“It is a way to get more capital, more investment. In the end the settlers will get the same amount of dividend,” he told reporters.

Gua Musang MP Tengku Razaleigh, who narrowly lost an Umno leadership battle to Dr Mahathir in 1987, had said that “this is a question of life and death for the settlers. If the land is sold because shares are sold, that means we no longer have rights to the land.”

“I do not know if the government has another plan to guarantee the rights of settlers, but I do not see it,” the Kelantan prince said in an interview with Harakahdaily.

Prime Minister Datuk Seri Najib Razak had recently said the listing of FGVH, announced in Budget 2012, is expected to take place in April instead of the middle of the year as was earlier planned.

But critics contend that the proposed listing, which will see loss-making FGVH assume control of the FELDA Investment Co-operative (KPF), will short-change smallholders and saddle FELDA with up to RM1.5 billion in yearly deficit.

FGVH subsidiaries such as FELDA Iffco Sdn Bhd, FELDA Global Technologies, FELDA Global Ventures Middle East and FELDA Global Ventures Arabia are reported to have chalked up accumulated losses of around RM500 million up to last year.

The profitable FELDA Holdings has a workforce of some 19,000 employees, with a labour force of 46,795 workers at 300 estates, 70 palm oil mills, seven refineries, four kernel-crushing plants, 13 rubber factories, manufacturing plants and several logistic and bulking installations spread throughout Malaysia and several locations overseas.

The government has said the move will result in a RM5.9 billion lump sum payment to settlers but the National FELDA Settlers’ Children’s Association (ANAK) has insisted it will not be in cash but shares in FGVH.

Last week, a group of settlers won a temporary court order blocking the transfer of shares from their co-operative to FGVH, a crucial step in Putrajaya’s plans to list the plantation firm.

KPF cancelled yesterday’s extraordinary general meeting following the temporary court order.

FELDA then formed a special purpose vehicle (SPV) to take the majority stake in FGVH, saying it will take care of the interest of some 112,000 settlers, blaming the opposition for misleading the settlers into blocking KPF’s sale of 51 per cent in commercial arm FELDA Holdings to FGVH.

“Because of the action by these eight people, KPF members cannot take part in the proposed listing of the one of the biggest palm oil producers in the world,” FELDA chief Tan Sri Isa Samad said in a statement issued yesterday evening.