FGV (Felda Global Ventures) listing: Corporate vs. Peasant Settler

December 26, 2011


FGV (Felda Global Ventures) listing: Corporate vs. Peasant Settler – Sakmongkol 47

Two upcoming events are waited upon with great anticipation: (1) The outcome of an injunction application by a few settlers to stop the FELDA FGV listing and (2) the January 5 EGM of Koperasi Permodalan FELDA (KPF).

The outcome of the second event is a foregone conclusion. Chairman Isa will get elected as the KPF chairman despite not having the qualifications to become an office bearer. He is not a settler nor is he a FELDA employee. But the Minister in Charge of FELDA has given his approval, what can people do? The Minister is also the Prime Minister. He lords over whoever lives in this land. We must not be sidetracked by this sideshow involving the two bit actor Isa Samad. The more pressing matter concerns the listing exercise.

Why the Injunction?

Why the injunction? Why should 4 people extend energy and time and assume the risks of being called traitors and all that, want to apply an injunction? Greed can’t be the overriding objective? If it is, it’s more profitable for the 4 people to side with Chairman Isa who can be generous as he is pleased.

The object of the injunction is to stop FGV taking over assets and shares belonging to KPF in FELDA Holdings. These people believed that 350,000 hectares of land which FELDA took was actually meant for settlers.

All the assets owned by KPF in FELDA Holdings will be leased to FGV for the next 99 years. They will no longer exercise control over the assets as their interests are all converted into shares. FELDA Holdings is 51% owned by settlers and 49% owned by FELDA Global.

They are willing to risk it all, because they believe settlers are being sold out. This listing is the ultimate shortchanging of settlers. The first occurred when FELDA withheld more than 300,000 hectares of land from being given to settlers. By assuming ownership of the land, FELDA was able to become a planter itself.

So we have the peasant settler and the corporate settler. The corporate settlers have moved on to becoming fabulously rich while the peasant settler (Tun Razak’s regimented landless and jobless) have remained relatively behind. They get to enjoy the trickle down effects defined and determined by FELDA which practically runs the business on behalf and for the benefit of settlers.

The corporate settler sells CPO and busies itself in a wide range of downstream manufacturing and marketing activities. They were even able to go into various businesses out of the capital created from ownership of the land which is supposed to go to the landless and jobless. The second took place, when FELDA listed its sugar refining business. It made over RM 800 million out of that IPO.

How much did KPF make by virtue of owning 20% of the business? On paper it made RM300 million?  How did Sabri Ahmad (left) cull this figure? If KPF makes a paper gain of RM300 million and the RM 300m is 20%, then the whole gain is RM1.5 billion. But Sabri says, FELDA made RM 800 million. Maybe it’s just a figure of speech- the point is, he wanted to say KPF made money albeit on paper.  Does that raise the share value of KPF in FELDA Holdings now that it made RM300 million paper gain?

If the injunction is successful, the proposed listing of FELDA Global will be delayed. The listing will see the merger of FELDA Holdings with FELDA Global. The smaller partner in terms of equity, FELDA Global is buying out KPF which has 51%. How is the nature of the transaction? Does it involve and offer by FGV to buy out KPF at a certain price or will it involve just a share swap? You priced it with premium fella- that’s why KPF is getting 61%.

But the share price of the new listed entity is also at a premium. You can easily inflate the price of the would be listed entity, paint glossy pictures, introduce exotic phrase such as unlocking value and so forth- you will probably induce KPF representatives to believe they are getting a good deal. KPF will get 61%. That’s good you say. Isa Samad goes around berating ungrateful settlers- “apa lagi awak semua mahu- dari 51% jadi 61%?”

But we ask in return- 61% of how much? If 30% of the shares are sold to the public, the settlers end up with 61% of 70% of the business.  That’s not all. 30% is held by the public- the interests of settlers are converted into shares which are tradeable in the market place. As with the track record of bumiputera held equities, you can bet that chances are, the shares will be sold. If that happens, the bumiputra equity portion in the listed entity will be lost for short term gain.

Source of Peasant Settler Dissatisfaction

We have to go back to the primary source of dissatisfaction. The peasant settler has remained more or less the same. The corporate settler makes it big. The peasant settlers get palliatives- bonuses here and there. RM 1200 as yearly bonus translates into RM 100 per month. RM 400 per year translate into RM30 per month- not even enough to buy a T-bone steak at NFC’s Meatworks.

The peasant settler gets MRSM colleges, indoor stadiums, futsal stadiums and other social amenities but the value of these pales in comparison with the amenities and wealth enhancing resources obtained by the corporate settler.The corporate settler has moved on into oleo chemicals, downstream activities, hotels, sugar business etc. Why can’t the peasant settler be organized that same way?

The fundamental reason why this listing is vehemently opposed is that people concerned believe it’s a sellout and it’s the culmination of unconscionable acts by FELDA.

10 thoughts on “FGV (Felda Global Ventures) listing: Corporate vs. Peasant Settler

  1. We still think privatization is a panacea.Haven’t we learned some painful lessons from all our failed privatised projects of the 1980s-1990s and the bailouts that we had to undertake using taxpayers money and funds from PETRONAS? “Those who cannot remember the past are condemned to repeat it”, says George Santayana.–Din Merican

  2. Yes Sakmongkol, can’t trust these Crooks ! They have a long record of breaches of trust….in carrying out their responsibilities as Wakil Rakyats or YBs and YABs. To secure positions as Mentris Besar by licking boots of their Higher-UPs, they virtually became Mentris-Besar-kepala : sheer arrogance all breeding from Ignorance & Stupidity !

    In this wrangling of FELDA Assets that you describe….they have become cunning through years of experience : this Idiot had actually been cheated big time by some close ‘ buddies ‘ who has double-crossed him, and taken their wealth overseas .

    No way of dealing with these kind of cheap-skate Characters….except perhaps sending them under I.S.A when there is change of power after GE13 – yes Internal Security Act applies.

  3. PS: Other things remaining equal.
    Nothing remains equal. That is convenient for economists to use ceteris paribus.–Din Merican

  4. All other things remaining equal? But in the real world nothing remains the same and everything is in a state flux. Does that not make economics a pseudo science? And economists wishy washy experts of sorts in their chosen field? Nobody has a clue of how to get out of the current recession.

  5. Dato Sabri, since when Felda owns 350, 000 hectares under its own name? One would have thought that all Felda land belongs to its settlers. It was part of land reform undertaken by the late Tun Abdul Razak.

    This must have happened only recently and perhaps under your watch. Did you and Isa Samad on the advice of the Investment banker who is putting the listing of Felda Global Ventures deal together make the change? If this is so, the political backlash will affect Najib’s political future and the survival of his administration. Please explain.

  6. A lot has been and is still said and debated about this issue in cyberspace. I supposed this is what we get when we put a fox in a chicken coop.

    It seems that the PM has been committing mistakes after mistakes either in his choice of policies or personalities. What are his advisers doing?

    So now the drama will move from cows to oil palm and the interlude will be DSAI’s fate….

  7. Carpetbaggers. Does this term strike a chord or jog a memory?

    But then, 70% of Felda settlers have never seen, much less owned a carpet in all their lives. No need for it in the tropics. All they have are prayer mats – donated by their Lord, UMNO – whose leaders own luxurious carpets, hung on walls. Walls of which, also include young trophy wives..

    So how would these ignorami be expected to understand that they and their land are about to become objects of a ‘Fire-Sale’? They will no longer be ‘peasant settlers’ – they will become serfs, working on land they owe to their Lords. That is not corporatism but enslavement.

    But really why should a Chinapek like me care? They deserve their just desserts.

  8. Carpetbeggar? No Carpetman now seeking new vehicle after making killing in penny stocks.
    Most Felda settlers come back from Haj with loads of carpet CLF. They are blinded by the Ang Pows from Lu tolong waaa, waa tolong lu Santa Najib. Yes they will become serfs all their lives and being thrown bones once in a while which they happily lap up.

  9. Yup Semper, they are so desperate, that they are messing about in penny stocks. Such largess are not to be scoffed at. The profits made by such tinkering are deemed minuscule, and meant only to purchase double loop polyester carpets for suraus and other places of worship, sold to them by that very same carpet-man.. Circular thinking? You bet.

    What have all these Felda’ed folk been doing all their lives? Besides in-breeding of course.. While “Hill-Billy” is an apt ‘Americanism’ to denote illiteracy and ignorance, over here “Felda” becomes the Malaysian equivalent – but without even the independence, much less freedom of choice and thought. Instead of just being ‘Melayu mudah lupa’, these folk become ‘Senang lenang dan bodoh-sombong’.

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