Government ‘fleecing’ settlers RM8.8b with FGVH listing, claims Pua
KUALA LUMPUR, May 31 — DAP MP Tony Pua today claimed that Putrajaya would be “fleecing” FELDA settlers of a whopping RM8.8 billion through the leasing of their land under the highly-anticipated public listing of FELDA Global Ventures Berhad (FGVH).
The DAP publicity secretary said the exercise would also see FELDA losing some RM394 million annually to FGVH and retaining only 40 per cent ownership in FGVH, with the balance sold to local and foreign investors.
“In the government’s haste to list FGVH for mysterious reasons, it has really turned out to be a no-holds-barred attempt to fleece FELDA settlers and severely shortchange the government.
“It is clear that the interest of the FELDA settlers have been compromised in order to ensure a sizeable listing for FGVH,” Pua (picture) said in a statement.
His accusation comes just as Datuk Seri Najib Razak is about to launch the final prospectus for the FGVH listing, an long-awaited exercise that the prime minister had promised would bring great benefits to settlers of the federal land scheme.
Explaining his claims, Pua pointed out that Koperasi Permodalan FELDA (KPF), which represents the interests of the settlers, had been completely left out of the FGVH listing exercise.
KPF is the 51 per cent shareholder of FELDA Holdings Bhd (FHB), while FGVH, a wholly-owned subsidiary of the FELDA statutory body, holds the balance 49 per cent. Citing KPF’s 2010 annual report, the co-operative is 70 per cent owned by FELDA settlers while the remaining 30 per cent is owned by employees.
Pua claimed that according to the FGVH draft listing prospectus, not only would KPF not get any ownership of FGVH shares once it gets listed, the co-operative’s existing business and income would be “cannibalised” by FGVH.
Prior to 2010, he explained, the government statutory body FELDA owned 355,864ha of plantation land, which was managed by FELDA Plantations Sdn Bhd, a 51 per cent subsidiary of FHB. The remaining 49 per cent, he said, was owned by FELDA.
But, said Pua, as at January 2012, FGVH was granted 99-year rights to the land.
He said in 2011 alone, the 355,864ha of plantation land in question had generated some RM680 million in net profit to FHB.
The profit attributable to KPF-FELDA would be RM510.1 million, said Pua, based on KPF’s 51 per cent ownership of FHB and FELDA’s 49 per cent ownership of FELDA Plantations Sdn Bhd.
“Given the proposed price of RM4.65 per FGVH share on a market valuation of 16-17 times earnings, KPF’s stake in the above plantation land contributed as much as RM8.8 billion to FGVH’s market capitalisation,” he said.
However, the government’s promised “windfall” of RM15,000 to each of the scheme’s 112,635 settlers, amounting to RM1.69 billion, was merely a fraction of the RM8.8 billion value of the plantation land that KPH had ceded to FGVH.
“The compensation certainly does not make up for the loss of profits to KPF over the next 99 years,” he said.
Pua also claimed that the government was “shortchanging” FELDA by leasing the above plantation land to the soon-to-be listed FGVH at “dirt-cheap” prices of RM1,490 per ha or RM530 million annually.
He drew comparisons with the Al-Hadharah Boustead Plantation, which receives an average rental of RM3,358 per ha for its plantation land.
Pua said that even after taking account that the FELDA land has a lower yield by 20 per cent, the market price for leasing the land should at least be RM2,600 per ha.
“Hence the heavily discounted 99-year land lease agreement at RM1,490/ha causes FELDA to lose RM394 million annually. FELDA would lose some RM39 billion over the next 99 years, before taking into account any upward revision in market rental rates,” he said.