Felda unit listing hits snag
EGM of settlers’ cooperative cancelled for second time
PETALING JAYA: Felda’s quest for a smooth listing of its investment arm, Felda Global Ventures Holdings Bhd (FGVH) on Bursa Malaysia hit another speed bump following the cancellation of Koperasi Permodalan Felda Malaysia Bhd (KPF) EGM, which is slated to take place today.
This marks the second time the EGM of KPF, a cooperative owned by Felda settlers, had to be cancelled on such short notice.
The first, scheduled on Jan 5, was cancelled after four Felda settlers from Pahang managed to get the court to grant an injunction on Jan 4 to stop the EGM from taking place.
In a press statement yesterday, KPF secretary Abidin Abd. Rahman announced that the cooperative EGM on Feb 22 was cancelled due to an interim injunction granted by the Kuantan High Court on Feb 17.
The injuction was for KPF to stop from selling its existing stake in Felda Holdings Bhd to FGVH at the EGM.
Felda settlers, via KPF, hold a 51% stake in Felda Holdings, which in turn is a 49% subsidiary of FGVH.
The statutory body under the Prime Minister’s Department, Federal Land Development Authority (Felda), meanwhile has a 100% stake in FGVH.
It is interesting to see many court decisions have been in favour of Felda settlers. — SOURCE
A source close to Felda told Starbiz that the KPF EGM was targeted to be attended by 1,268 KPF delegates and the KPF board members headed by its chairman, Tan Sri Mohd Isa Abdul Samad, who is also Felda chairman.
He said: “It is interesting to see many court decisions have been in favour of Felda settlers, reflecting serious concern over the uncertain state of their future income that will likely be affected by the decision of Felda management to list FGVH.”
“The listing is a rather complex subject especially when it involves the long-term leasing of settlers’ land to FGVH.
“What more for the simple-minded Felda folks who are concerned in calculating their income based on the oil extraction rate and fresh-fruit bunches, and now dragged into the dynamics of the high corporate finance environment,” added the source.
On the other hand, the political parties are aware of the significance of the 112,635 Felda settlers’ votes in 54 parliamentary constituencies, which can definitely swing the pendulum in the upcoming 13th general election.
Therefore, the settlers-linked groups whom are against the listing of FGVH had been successful so far by capitalising on the issues of uncertainty in terms of the loss of control in the income flow of the settlers.
The Felda settlers also had the impression that once they surrendered their existing stake in FGVH, there would be no guarantee of the future performance of the shares in the listed entity given the volatile nature of crude palm oil prices.
In addition, many are questioning whether the consistent dividend track record at an average of 14% per year over the past 10 years could still be maintained post-listing FGVH.
Another point raised by a veteran industry consultant is that whether the listing exercise of FGVH was done via the legal way by both Felda and the Government.
“Felda, the statutory body was formed by an Act of Parliament in 1956 with the sole purpose at that time to eradicate poverty and improved the socio-economic welfare of the bumiputras.
“Therefore, Felda’s subsidiaries should also fall under the same Act.
“I believe for the FGVH listing, there is a need for the parliament to approve it and certain changes must be made to the Act,” he added.