Malaysia

FELDA challenged to show trust fund for settlers

KUALA LUMPUR, June 1 — The listing prospectus for FELDA Global Ventures Holdings (FGVH) makes no mention that a 20 per cent stake will be held in trust for settlers, sparking suggestions that the Federal Land Development Authority’s claims yesterday of a fund was an afterthought in the face of continued controversy over the plantation giant’s initial public offering.

The federal land development scheme’s chairman Tan Sri Isa Samad told a press conference yesterday that a 20 per cent stake was already set aside under a trust fund after the FELDA Settlers Cooperative (KPF) refused to participate in the listing of FGVH.

But DAP publicity secretary Tony Pua today (picture) challenged Isa’s claim.

He pointed out that in a statement on April 27 KPF had clearly expressed shock that it had been left out of the IPO for FGVH.

“They had claimed that the decision to leave them in a lurch contradicts the Budget statement issued by the Prime Minister Datuk Seri Najib Razak, which stated that the interest of the FELDA settlers will be protected via the majority ownership of FGVH via KPF.

“KPF has further stated in no uncertain terms that they had supported the government’s intent to list FGVH,” Pua said in a statement.

As such, he questioned Putrajaya’s reason for setting up the “mysterious” trust fund for settlers instead of offering FGVH shares directly to KPF.

He said the fact that the proposed “trust fund” was not mentioned in the listing prospectus unveiled yesterday makes the case that the idea was merely an “afterthought” expressed to placate the settlers.

KPF, which is 70 per cent owned by FELDA settlers and 30 per cent held by FELDA employees, is an entity set up in 1980 to become a savings and investment trust for FELDA members. Its intent was to give a fair opportunity to FELDA members to take part in equity ownership of companies set up by FELDA.

Pua also repeated today that the FGVH, after the IPO, would be “cannibalising” the income and earnings of KPF as 355,864ha of plantation land previously managed by the cooperative’s subsidiaries have been transferred to FGVH.

This, he said, would boost FGVH’s earnings by some RM680 million annually.

“Hence the exclusion of KPF from any participation in FGVH after KPF’s future earnings have been significantly cannibalised by the latter proves that the government isn’t sincere about prioritising and protect the interest of the FELDA settlers,” he said. Pua also disputed Najib’s assurance to settlers that they would be prioritised in the listing as over 70 per cent of the retail shares offered in the IPO would be allocated for the settlers, FELDA staff and individuals who have contributed to the organisation.

The Petaling Jaya Utara MP said the assurance was “disingenuous” as only 12.5 per cent of the offered shares were actually reserved for retail investors.

“Therefore in real terms, only 9.2 per cent of the shares offered are reserved for the above group of people to purchase,” he alleged.

“And, in fact, after listing should the entire allocation of shares be fully subscribed, the said group of settlers, FELDA employees and other contributing individuals will hold only meagre 3.68 per cent of the enlarged share capital,” he added.

Pua urged Najib and Isa to immediately announce that the proposed 20 per cent of stake in the “trust fund” would instead be transferred directly to KPF, as the sole body entrusted to protect the settlers.

“If the government chooses to persist with the hare-brained ‘trust fund’ idea, then it is clear that the government intends only to take the settlers for a ride,” he said.

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