Felda IPO: Unfair to settlers, FANTASTIC to employees and rich Umnoputeras - Wong Chen

Parti Keadilan Rakyat eagerly awaits the launching of the complete prospectus on the IPO of FGVH by the Prime Minister on Thursday 31^stMay 2012.

Come Thursday, we will all finally get to know how many shares Tan Sri Isa Samad will get. As a preview to Thursday and staying on the subject matter of shares allocation, we will like to expose to you the following disturbing facts.

Twelve days ago we exposed that settlers “durian runtuh” windfall represents a mere 9% of FELDA’s total gains from the IPO. Today, we will provide our comments on the 2.2 billion FGVH shares offered for sale. The breakdown of the shares allocation is as follows:

General public	73 million shares (2% of FGVH)
Institutional investors (EPF, PNB, Tabung Haji, Louis Dreyfus)	1.5 billion shares (41% of FGVH)
FELDA employees	109 million shares (3% of FGVH)
FELDA settlers	91 million shares (2.5% of FGVH)
MITI approved Bumiputera investors	420 million shares (11.5% of FGVH)

The manner the shares are allocated raises two important questions:

Question 1: Why are settlers (numbering 112,635) getting less shares than the 3,835 employees of FELDA? Assuming a 100% take up rate, each settler will only get 810 shares whereas each employee of FELDA will get 28,368 shares. This effectively means that an employee of FELDA is being offered 35 times more shares than a settler.

Question 2: More alarming is the MITI approved Bumiputera share allocation of 420 million shares. Who are these special Bumiputeras that deserve 4.6 times larger allocation than all the settlers collectively? What have they ever done to help develop FELDA? We do not know their identity but we know that under MITI’s official guideline, to be a Bumiputera investor approved by MITI, you must first be very rich.

The guideline says that in order to qualify as a MITI approved Bumiputera investor, an individual must have at least RM3 million in assets. If the investor is a company (100% Bumiputera owned), it must have assets worth RM10 million. As such, we demand that MITI produces a complete disclosure list of the rich Bumiputera investors and beneficial owners of this IPO.

We demand this list because the settlers have a right to know why these rich Bumiputeras are many many times more deserving than them. We demand to know how many rich Bumiputeras will be allocated shares compared to 112,635 settlers. Since this IPO is of great national importance, we believe that the public also deserves to know if any of these rich Bumiputeras investors are linked to UMNO.

Putting things in proper context, I would like to remind all that FELDA was set up to help the landless Bumiputera poor. In addition, the PM has announced that the FGVH IPO to be an exercise that will greatly benefit the settlers. The way the shares are allocated clearly shows that the PM is more interested in helping the rich. In conclusion, we urge PM Najib to withdraw the undeserving rich Bumiputera allocation and give it to the settlers. We also ask the employees allocation to be appropriately reduced in favour of settlers.

WONG CHEN IS CHAIRMAN OF THE PKR INVESTMENT & TRADE BUREAU