KUALA LUMPUR, April 2 — The Kuantan High Court today rejected an application by eight FELDA settlers to halt the listing plans of FELDA Global Ventures Holdings (FGVH).
The settlers had last month won a temporary court order blocking the transfer of shares from their FELDA Investment Co-operative (KPF) to FGVH, a crucial step in the plan to list the plantation firm.
“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,” FELDA Settlers Children’s Association (ANAK) chairman Mazlan Aliman told The Malaysian Insider.
According to Mazlan(picture), High Court Justice Mariana Yahya ruled that an injunction against FELDA’s listing process 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 the PAS central working committee (CWC) member.
The government has promised to move ahead with the proposed listing of FGVH, with or without the 51 per cent stake in commercial arm FELDA Holdings held by settlers of the Federal Land Development Authority (FELDA).
But ANAK has vowed a fresh suit to stop the proposed listing of FGVH that Putrajaya says will benefit those involved in the land scheme.
Deputy Minister in the Prime Minister’s Department Datuk Ahmad Maslan has said the government will not delay the listing beyond June as it wanted to capitalise on high crude palm oil (CPO) prices.
He said the listing will go ahead whether or not the settlers are successful in winning an injunction against the share transfer when the matter is heard in court on March 22.
The government previously insisted it has the backing of “the majority of settlers”, despite reports of widespread opposition.
FELDA chairman Tan Sri Isa Samad had announced a special purpose vehicle (SPV), after the court blocked the share transfer, to cater for the welfare of some 112,000 settlers.
Isa said that as any potential proceeds from the proposed listing would not be channelled through KPF, the SPV would assume this role and ensure that settlers would benefit directly from the listing and participate fully in any potential growth.
But PKR charged that the SPV would only lower FGVH’s listing value, saying that this decision was a direct snub of the co-operative.
KPF has about 220,000 members, of whom 112,635 are FELDA settlers. The rest are FELDA employees and children of settlers.
Reuters reported in February that Putrajaya could delay FGVH’s listing due to settlers’ opposition, saying the deal risks undermining Barisan Nasional’s (BN) support from voters long considered the ruling pact’s vote bank.
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 deficits.
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.
However, Ahmad told Parliament last month FGVH recorded pre-tax profits of RM203 million and RM366 million in 2009 and 2010 respectively.
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 ANAK has insisted it will not be in cash but shares in FGVH.
Former Finance Minister Tengku Razaleigh Hamzah has also criticised the move, saying it would expose land belonging to 200,000 smallholders to the open market.
But former PM Tun Dr Mahathir Mohamad recently defended the planned listing of FGVH as a “great opportunity” for FELDA to expand.