KPF snub will lower FELDA listing value, says PKR

By Shazwan Mustafa Kamal

February 23, 2012

PETALING JAYA, Feb 23 — FELDA’s formation of a special purpose vehicle (SPV) to take the majority stake in FELDA Global Ventures Holdings Bhd (FGVH) will only lower its listing value, PKR has charged.

PKR strategic director Rafizi Ramli said the decision was a snubbing of the FELDA Investment Co-operative (KPF), after eight settlers blocked the co-operative from injecting its assets into the company for its contentious initial public offering (IPO).

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, but FELDA chairman Tan Sri Isa Samad then announced the SPV which will take a majority stake in FGVH, saying it will take care of the interest of some 112,000 settlers.

Isa blamed the opposition for misleading the settlers into blocking KPF’s sale of 51 per cent in commercial arm FELDA Holdings to FGVH.

“If the listing of FGVH is carried out without asset injection from FELDA Holdings Berhad due to the court action by the settlers, the listing value will be lower, around RM3 billion, not RM21 billion as mentioned by the government,” Rafizi told reporters today.

The PKR leader charged that the formation of the SPV was proof that the government did not respect the concerns of FELDA settlers and that the SPV would slowly “take over” KPF’s function and role.

“The real cash cow in the FELDA group comes from FELDA Holdings Bhd, not FGVH,” said Rafizi, who pointed out that FGVH’s profit before tax returns in 2008 and 2009 were RM819 million and RM804 million respectively.

“Barisan Nasional’s plan is to transfer the companies and profit-making activities in FELDA Holdings Bhd from KPF (owned by settlers) to FGVH (completely owned by the government.

“Through this, the voice of the settlers and staff of FELDA will be less important, especially when the government invites other investors to buy shares in FGVB,” added the PKR man.

Rafizi said the best way to clarify matters was for a public debate between Isa, deputy minister in charge of FELDA Datuk Ahmad Maslan and himself, Mazlan Aliman or PKR FELDA bureau chief Suhaimi Said.

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 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.

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

But former PM Tun Dr Mahathir Mohamad today defended the planned listing of FGVH as a “great opportunity” for FELDA to expand.