Why we fear of Felda Global Venture Holdings listing...

Between his two brothers, his wife and himself, plus the shares inherited from his parents, Felda Sendayan settler R Thangam's family has about a million Koperasi Permodalan Felda (KPF) shares.

As an extended family which most likely has the largest shareholding in KPF, Thangam's family - one of the few non-Malays to take part in the land-for-the-poor project - is in for big bucks in the proposed listing exercise.

"We can make millions from the Felda Global Ventures listing exercise. But I don't support it. This is our pension and we don't want to gamble with it on the stock market," he said when met on Wednesday.

Born into the settlement scheme some 50 years ago, Thangam's plush home in Bandar Sri Sendayan, less than a kilometre away from the Felda settlement in Negeri Sembilan, is a far cry from his humble beginnings as a rubber tapper.

Having returned to Felda Sendayan at 29, after 11 years in the army, Thangam slowly built his savings through KPF shares and now cannot stomach the risk of rendering them into "useless pieces of paper".

He said in all, the family collectively gets at least RM15,000 a month as dividends - KPF has paid out an average 14 percent in the last 30 years - and that sum is enough for them to stop working.

"It's true that there could be really big profits to be made in the stock market, but with KPF, we have a guaranteed dividend of 10 percent. Is this also going to be guaranteed if we list?" he asks.

FGVH is offering to buy KPF's 51 percent stake in Felda Holdings - the parent company - in return for the same stake in FGVH, but analysts believe KPF's stake will drop to about 37 percent with the initial public offering.

While this is a minority shareholding, it is estimated to value about RM4 billion - RM1 billion more than what KPF's majority shareholding in Felda Holdings is now worth.

"Sure, it is more but how much will the settlers receive? They keep saying windfall, but how is it going to be distributed?" asked Thangam.

Booted out of meeting hall

The father of six added that only about 60 individuals hold 250,000 KPF shares - the maximum for any individual - with the 2010 annual report showing that about 60,000 people hold less than 500 units.

"So how will these people be made millionaires as promised by Isa Samad?" he asked.

Asking these questions in KPF's briefing on the matter last week landed Thangam, who is also PKR Rasah deputy division chief, in hot water with Felda chairperson Isa, who booted the settler out of the hall.

"It's just not right," said Saparuddin Mohd Yassin, 62, whose holds 250,000 KPF shares and is a former settler from Sendayan. His father joined the scheme in 1970.

"As shareholders, we want to know what will happen to our shares? Do we exchange them for FGVH shares? Is it a one-to-one exchange? How many shares will be made available to KPF members?" he said, listing out the yet unanswered questions.

Having retired from a golf course consultancy company, Saparuddin uses his KPF dividends of about RM3,000 a month for day-to-day expenses and he smells something fishy in the lack of information over the deal.

"If it really benefits us then why are they sneaking around about it. Just tell us the details," said the former Sendayan Umno branch chief, who left the party after being "bitten" by the state government in 1996.

In 1996, Felda Sendayan settlers chopped down their rubber trees and sold their land to the state government, then led by Isa, only to be given 10 percent of the promised sale price.

After about a decade of tussling, most of the settlers reluctantly accepted the new "package" offered by new Menteri Besar Mohamad Hasan at a loss.

Those met by Malaysiakini around Felda Sendayan confess they hold a grudge against Isa (left) for his hand in the Sendayan land deal, and are equally suspicious of what he promises now as Felda boss.

To add to this fear, Saparuddin rattles out the names of government-backed companies which have failed at the stock market.

His fear is not entirely unfounded. A Reuters report says "investors are wary over the listing because the government is likely to retain significant influence over the new company through shareholdings".

 
Investors also share Saparuddin's worry over tainted Isa, who was found guilty of vote buying in Umno elections seven years ago,  the newswire reported.

Sentimental link to land

For Thangam, it is also the sentimental value of the Felda land. Even though the FGVH listing will not touch settlers' land, it includes some 350,000ha of Felda Plantations' land.
 
The son of an estate worker whose decision to enter the Felda scheme changed his family's fate, Thangam remembers well their poor beginnings when they had to fight off locusts to grow rice to eat.

"Why should this land be released to the open market? It should stay in Felda, in Malaysian hands. I'd rather they open the land to new settlers. Felda is the blood and sweat of the settlers," Thangam said.

While the doors are still open to KPF, Isa insists that the listing will go ahead, with or without the cooperative on board.

Analysts believe that this will be bad for KPF shareholders as they will not hold a stake in FGVH-controlled subsidiaries, where all the high-growth businesses and projects are likely to be parked.

In such a case, the New Straits Times reported that Felda Holdings' revenue will be undermined, making it difficult to give out guaranteed dividends.

"But the fact is, we are guaranteed 10 percent dividend with KPF. Depending on how well FGVH does on the market, it could be 5 percent and what can we eat with that?" Saparuddin asked.

And with Isa announcing that a special purpose vehicle will be set up to represent settlers' interests in the listing exercise, it appears that KPF shareholders who are settlers will still get a piece of the listing pie.

If there is indeed a windfall, Thangam hopes the benefits will be shared with settlers in the form of KPF shares.

"You can't blame the older settlers for giving the money to their children as it is out of love, but they don't realise that they'll need some for their later years too," Thangam added.- malaysiakini

Peneroka bimbang risiko penyenaraian FGVH

Seorang peserta Felda, R Thangam berkata beliau dan anggota keluarganya memiliki sebanyak kira-kira satu juta saham Koperasi Permodalan Felda, termasuk unit saham yang diwarisi daripada ibu bapa mereka.
Keluarga berkenaan mungkin merupakan pemilik saham terbesar dalam KPF dan mereka mungkin mendapat durian runtuh sekiranya penyenaraian Felda meneruskan dengan cadangan untuk menyenaraikan salah satu anak syarikat – Felda Global Ventures Holdings.

Thangam bagaimanapun tidak menyokong usaha itu kerana beliau tidak mahu "memperjudikannya" di pasaran saham, katanya ketika ditemui Malaysiakini, Rabu.

Beliau dilahirkan di tanah rancangan tersebut 50 tahun lalu dan rumah besarnya di Bandar Sri Sendayan amat jauh berbeza berbanding ketika beliau mula menoreh getah di tanah rancangan yang terletak tidak jauh dari taman perumahan tersebut.

Sekembalinya beliau ke tanah rancangan itu pada usia 29 tahun, selepas 11 tahun berkhidmat sebagai tentera, beliau membuat simpanan melalui saham KPF.

Beliau tidak dapat menerima risiko bahawa sijil saham itu mungkin hanya akan menjadi helaian kertas yang tidak bernilai.- malaysiakini

The Felda Listing

The question we should ask all thought leaders of FELDA is this. Why should a loss making business entity, be allowed to do a reverse takeover of FELDA holdings? 

FGV owns 49% of FELDA Holdings which has been making money all the time. FGV hasn’t got a track record and has no standing at all to come out with this proposal in the first place.

Can FELDA tell everyone, how much did FGV lose really? We were only told of losses amounting to RM 500 million. One thing we do know is, FGV is consistent. It has CONSISTENTLY lost money for 5 consecutive years. Perhaps Dato Sabri Ahmad can disclose fully and honestly, how much FGV lost during those 5 years. Maybe he has gone to the PM and reported everything is OK sir. Najib is pleased to hear that kind of story.

If FGV lost money over 5 consecutive years that would strongly suggest that it is incompetent. Two, it would also suggest, just as in most GLC’s subsidiary companies, some people got very rich while the companies they helmed suffers financial hemorrhage. Before FGV comes along and wishes to take FELDA Holdings, it must come clean about itself.

What is the purpose of this listing? Is it an attempt to save a losing business concern (FGV) itself? Is it done to raise money for FELDA? but FELDA has a lot of money. It has the mother lode of financial resource which is provided by their palm oil plantations. Unless you are a super moron, all plantations make money.

Remember...MAS was making money and doing fine, when suddenly some smart alec suggested that it was good to privatize MAS. So Tajuddin Ramli in the name of service to the nation agreed to take 32% of MAS provided he was given a guarantee over his purchase of the share. Mahathir gave him that because he considers Tajudin as a captain that can pilot the NEP objectives.

So, can we ask FELDA how much they paid Ethos to come out with the listing proposal? It must be a large amount, sufficiently large to allow a leading member of Ethos to buy a RM 15 million penthouse unit in an upscale condominium.

So, we ask Dato Sabri(right,below), lets asked him 2 questions. (1) How much did FGV lose really and (2) How much did FELDA pay Ethos?
 
Because the PM guarantees it says Chairman Isa(right). Coming from someone who has made a mess of Negri Sembilan- now that’s something. Isa is the man of Mahathir’s heart. The captain of the NEP.The government is bent in seeing the listing.

Maslan said the listing exercise will raise RM 21 billion.

How much will FELDA get? I was told that Dato Sabri told the PM, the bulk of the money raised will be channeled to the PM’s department.

The PM is elated at the prospects of getting RM 13 billion or so. He can go back to Pekan and replace all the dilapidated hoses of the rakyat in Pekan. His generosity will be ululated by the ladies and wanita UMNO Pekan for generations to come.

FELDA will probably get RM 8 billion. That will mean PM department will get around RM 13 billion to allow the PM to play Santa Claus for a long time like in the above example we gave.
 
What will FELDA do with the RM 8 billion? Since it has borrowed money from EPF, it must now pay EPF. The outstanding is about RM 3 billion. If FELDA pays RM 3 billion, it is left with 5 billion. From this 5 billion, it must pay the windfall to FELDA settlers- 112,000 of them. That will probably mean another RM 2 billion gone.

Yes, my FELDA brothers-It’s not FGV or the government that will pay the windfall. That money comes from FELDA itself out of the profit share it gets from the listing. The biggest beneficiary is the PM’s department which will get some 13 billion from the listing exercise. That is why the PM supports the listing of an otherwise loss making concern. 

With RM 3 billion left, Felda can operate at its current level of providing benefits to the 112,000 settlers in the various FLEDA schemes for only one year. After that, it will be reduced to a beggar.

With the listing, what will the settlers lose? It will lose the bulk of revenue. How come? It will immediately lose the 350,000 hectares of oil palm plantations managed by FELDA Plantations. The 350,000 hectares of land will be leased to FGV for 99 years. 

FELDA needs around RM 3 billion each year. From its plantation business, it gets about RM 2 billion a year and the balance it gets from its other investments. With the cessation of 350,000 hectares, FELDA is left with about RM 400 million a year.With the 400 million, how will FELDA provide welfare to the 112,000 FELDA settlers and to FELDA schemes?

What about the terms of the lease? We have not seen the terms of the 99 year lease. How will FELDA get paid? It’s said that FELDA will get paid every quarter? Why every quarter when FGV makes monthly profits? Why is the lease to FGV revisable only at 20 year intervals?

Why is the lease to FGV revisable only at 20 year intervals?  Sabri Ahmad and Isa Samad must come out with full disclosure about the listing.-Mohd.Ariff Sabri bin Hj. Abdul Aziz.aka sakmongkol.blogspot.com

(Catatan di atas adalah sedutan daripada artikal terbaru Datuk Mohd.Ariff Sabri yang dimuatkan dalam blognya.) Baca artikal penuhnya di sini.

cheers.