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Monday, July 24, 2017

Najib’s RM1.6b wooing of Felda settlers wrong

A QUESTION OF BUSINESS | Prime Minister Najib Razak’s six incentives (see table below) worth at least RM1.6 billion announced on Sunday besides being morally reprehensible for blatantly wooing Felda voters using government funds, may even constitute as bribery under the Election Offences Act.
Najib announced these incentives at a politically charged speechcommemorating 61 years of Felda in Putrajaya where he said the support of the Felda community resulted in the government remaining in power. “We will definitely defend Putrajaya,” he shouted to scattered applause, and apparently referring to the opposition, “... Don’t dream and don’t trumpet your wishes that the Felda community does not support the government.” 
And Najib made political capital too at the event by reminding the 20,000-25,000 settlers present there that it was his father, Abdul Razak, who was behind Felda and launched it in 1956, 61 years ago.
Most of the Felda incentives represent write-off of debts (RM947 million) while the remaining RM652 million represent grants, of which RM167 million will be paid over five years.
Najib also said he was giving a chance to 17,679 settlers who had not sold their products to Felda and who had sued Felda, to return to the fold.
"However, we are giving them a six-month period starting from next month to cooperate with Felda and to fulfil the requirements set," he said. He said the settlers who returned to cooperate would be eligible for the six incentives beginning from February 2018.
Why Felda is important
According to various reports and experts, parliamentary seats where Felda settlers are a majority - or are significant - number 54 out of a total of 222, a quarter of the total. If half of these seats or 27 seats went to the opposition this time around, and the other seats remain unchanged, the opposition will win the elections.
In the 2013 elections, the opposition took 89 seats to BN’s 133. If 23 more seats went the opposition’s way, that would have been enough for a change of power to have taken place.
Recent reports indicate that the opposition may have made inroads into Felda areas. Considerable media attention over corrupt practices at Felda, which saw major changes at the top recently and the suspension of its CEO pending investigation, is likely to have influenced Felda settlers negatively.
The drop in the price of Felda Global Ventures (Felda’s listed arm) which Felda settlers bought at an issue price of RM4.55 in June 2012, now languishing at around RM1.70, wiping out three-fifths of value, is likely to have added to settlers’ discontent. The write-off of part of the debt incurred in some of these purchases announced by Najib is aimed at reducing some of the ire of the settlers.
But if Najib really had the settlers’ welfare at heart, he should have ensured right from the start that Felda and FGV’s affairs were run better by a more professional team. Instead, he appointed Mohd Isa Samad as chairperson of both Felda and FGV in 2012. Isa was found guilty of money politics by Umno under former PM Abdullah Ahmad Badawi.
Uncontrolled acquisition spree
During Isa’s time at Felda and FGV, both organisations were engaged in a major, uncontrolled acquisition spree, spending billions of ringgit on rather dubious assets purchased at exorbitant prices.
FGV’s acquisition spree under previous CEO Mohd Emir Mavani Abdullah included the takeover of Pontian United Plantations Bhd for RM1.2 billion, Asia Plantation Ltd for RM628 million and RM2.2 billion for Felda Holdings Bhd, and 836 hectares of oil palm land from Golden Land Bhd for RM655 million cash.
It culminated in a deal with Indonesia’s Rajawali Group announced in June 2015 for FGV to acquire a 37% stake in PT Eagle High Plantations (EHP) and 93% to 95% stakes in Rajawali Group’s sugar project, in all worth about US$680 million (about RM2.9 billion) in cash and FGV stock.
By the time the Eagle High acquisition was announced, FGV needed to borrow money to do the deal as it had exhausted the RM4.46 billion from IPO proceeds. The deal was heavily criticised as being way too expensive, even by the EPF, at an estimated 70% premium to market. Also Peter Sondakh, the founder and owner of the Rajawali group, was said to be part of Najib’s inner circle and served as his adviser on Indonesian affairs.
Fortunately, CEO Zakaria Arshad, appointed on April 1, 2016 and the same one who is now on a leave of absence pending investigation, nixed the deal which was officially aborted in July 2016 after FGV started negotiations to restructure the deal in December 2015. Eventually in December 2016, the Eagle High deal was done with Felda which paid US$505 million (about RM2.2 billion) a quarter less, for the same deal.
Seen in this light, Najib’s appeal to Felda settlers to effectively back Umno and BN in the next elections is rather lame considering that people he appointed were responsible for the poor performance at both Felda and FGV, which are currently being investigated by the Malaysian Anti-Corruption Commission which has interviewed Isa amongst others.
Too little, too late
Although Shahrir was appointed Felda chairperson in January in place of Isa while Sulaiman Mahbob replaced Isa more recently as chairperson of FGV after its latest round of trouble, Isa was still given a plum position as acting chairperson of the powerful Land Public Transport Commission or Spad.
That he was not punished for poor performance at Felda and FGV indicates that what he had done at those places could have been at the behest of Najib himself. Najib’s actions come late in the day, and the most criticised of the deals - the Eagle High acquisition from Peter Sondakh - was merely passed on to Felda.
This is clear indication, if that is needed, that the welfare of Felda, FGV and the settlers has never been uppermost in Najib’s mind and that Najib has allowed unprincipled and possibly corrupt deals to undermine his father’s legacy - to uplift bumiputeras through land ownership and agricultural development.
Also, his blatant offer of those incentives worth RM1.6 billion ahead of elections which have to be called soon may well be an offence under Section 10 theElection Offences Act which has a long list of actions which can be considered “bribery”.
It is unlikely that he will be charged for the possible offences given the way the attorney-general is leaning these days, declaring for instance that the PM is not guilty of any offences relating to 1MDB despite evidence that money came into his account from funds from 1MDB.
However, Najib resorting to such measures which may push him to the edge of committing an election offence indicates more than the usual amount of desperation.
Yes, Felda settlers may decide his fate alright - one way or the other.

P GUNASEGARAM never ceases to be amazed at the increasing amount of incompetence and corruption at key government agencies. At some point, people are not going to tolerate that anymore and will reflect their indignance at the polls. Will it be at GE14? Email: t.p.guna@gmail.com. - Mkini

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