Court refuses to stop Felda IPO, paving way for showdown

The Kuantan High Court has rejected an application by 8 Felda settlers to stop the listing of Felda Global Ventures Holdings on the local bourse, a ruling that opponents to the IPO are widely expected to challenge.

The court's decision was not a surprise as over the weekend, Prime Minister Najib Razak had again publicly assured the share sale would not threaten the land ownership of the settlers by even "an inch".

"I reiterate that not even an inch of land owned by the settlers will be involved in the listing. It will only involve state government land allowed to be developed by the federal government as provided for under the Land (Group Settlement Areas) Act 1960 and hitherto managed by Felda Plantations," Najib had said in a speech read out by his deputy Muhyiddin Yassin.

Proceeds to go through SPV, not KPF

Last month, settlers who had opposed the listing had won a temporary court order blocking the transfer of shares from Felda Investment Co-operative or KPF to FGVH, a crucial step in the plan to list the plantation firm.

They opposed the IPO as being merely an election gimmick that would put short-term cash in the pockets of Felda community, but at the expense of the long-term value of their landed assets

To circumvent last month's court decision, Felda chairman Isa Samad had then announced that a special purpose vehicle (SPV) would be set up, and the potential proceeds from the proposed listing would not be channeled through KPF but through the SPV.

This alarmed the settlers even more. Hence, the latest application by the group of 8 to stop the IPO.

“The Kuantan High Court decided to reject the application made by the eight plaintiffs (KPF shareholders) at 12pm today.  Whether or not an appeal will be filed or further action to be taken will be decided later,” Mazlan Aliman, chairman of ANAK or Felda Settlers Children’s Association, was reported to have said on Monday.

Sell-out of settlers' trust

According to Mazlan, High Court Justice Mariana Yahya ruled that an injunction was “premature” as the decision for the equity disposal had not been made yet.

“The judge said that the evidence presented by the settlers was premature, speculative. The judge also ruled that KPF’s dispute should instead be brought to the Co-operatives’ Commission,” said Mazlan, who is also a PAS central working committee member.

Despite rising opposition to the IPO, Umno leaders have vowed that Felda - the world's largest land resettlement scheme - would be listed by June. Najib is expected to announce a windfall for the settlers from the IPO next month.

"What is that compared to the long-term intrinsic value of the settlers' lands. It is an unfair exchange and a sell-out of the trust placed in the government by the settlers," PKR vice president Tian Chua told Malaysia Chronicle.

Malaysia Chronicle