Side Views

Losing ground over FELDA — Sakmongkol AK47

SEPT 10 — What is happening to FELDA now, illustrates the state of our democracy under Umno. Settlers and employees got 200.6 million of the 2188.9 million shares to be sold.

The people representing the majority and overriding interest are the settlers and the employees. There are 112,635 settlers and 3835 employees. These represent directly the interest of FELDA people. They are the majority on whose backs and on whose name, this listing was supposed to be done for and benefits meant.

A question to FELDA people. Why get only 200.6 million out of the 2.188 billion shares offered and own the same from the 3.6482 billion of the enlarged share capital? That’s 5.5 per cent of the interest in FELDA. What Najib Razak and the government are doing to you is just cosmetics.

Because you are 116,470 strong you are bribed with RM15, 000, RM380 duit raya, 810 shares worth RM3685 at listing and that your sons’ and daughters’ PTPTN are being paid by the government using money that belongs to YOU. Najib will do anything to keep you corralled and addicted to the cocaine of handouts.

A question to Najib. If settlers represent your vanguard in the agenda to transform the economy, why assign only 5.5 per cent of the enlarged capital? Why not allow FELDA people through their KPF, own 70 per cent?

Because minority and moneyed classes control the actions and decisions of FELDA and the same with government.

So what has the FGVH issue got to do with the state of democracy under Umno? It illustrates that special interest groups determine our democracy instead of the wishes of the majority. The listing of FGVH has more to do with the agenda of the moneyed class than the agenda of the un-moneyed settler class.

Similarly the same is happening to the state of democracy under Umno. The country’s future is being determined by special interest groups who are self-selected and thrive on a single chosen issue.

When the FGVH shares rose up to near RM6 per unit, everyone said that was a testament of the confidence people have with FGVH. But who are the people exactly?

The “people” a nebulous and hazy term which could be infused with whatever meaning one wishes, refers to the various state governments that were asked to buy the shares and the various GLCs that Najib directed to buy FGVH’s stocks.

More important, the “people” are really the moneyed and special interest groups. And, of course, Najib alone represents the people and naturally he wasn’t shy to pat his own back. He must have been an accomplished contortionist.

Now that the price has gone down to around RM4.78, everyone who previously jumped up and down, says that the normal course in share trading. Going down is part of the normal course, but going up is taken to mean much more?

Our take is this: Going by the logic of the majority of us with only weak school certificates to vouch us by, the reduction in price, must be testament to lack of confidence. If the trending is more downwards than upwards, then lack of confidence is the stronger force.

We are not confident FGVH will take settlers to new heights nor are we confident Najib, Umno and BN can take our country to new heights. Najib’s only strategy in economics is to give out money, here, there and everywhere.

Right from the beginning, the listing of FGVH and the choice of the vehicle for listing of FELDA’s business interest was questionable.

There weren’t any settlers’ rep on its board. FGVH does business mostly overseas. Its business record was far from good or sufficiently good enough to inspire confidence that it can bring FELDA to new heights. It incurred continuous losses in its business most of the time and only made spectacular rebound on the profits near the listing date. FGVH may not do this, but we have heard of many cases where companies en route to listing cooked up the numbers.

Most of its profits came from the portion it owns in FELDA Holdings. Now what does FELDA Holdings do? The business done by FELDA Holdings is its brick and mortar business — planting of palm oil trees and selling CPO to the world. It wasn’t anything bordering on rocket science that seems to be preferred by FGVH.

FGVH wasn’t managing FELDA Holdings’ business. It was managed separately. If FGVH was managing FELDA Holdings and the company made profits consistently, then we can argue that perhaps, the profitability was due in part to FGVH management quality.

The facts are: FELDA Holdings made profits, its management was better. FELDA Holdings would be a better choice to buy out FGVH shares in Holdings. With FGVH out of the picture in Holdings, the other owner of FELDA Holdings — the KPF, representing settlers and employees’ interest can own 100 per cent. KPF, who then owns 100 per cent of FELDA Holdings, can hire a management company that can bring in more profits.

It was just paper shuffling. Ask investment bank A to come out with a proposal, it comes out with one that promises an initial listing price of RM5. Ask investment bank B, it comes out with a price of RM6. Hey, investment bank B is better.

A higher initial offer price means more money for the backroom boys. Those who have not soiled their feet in the plantations and perhaps may not even see a palm tree before.

Now that the price is going down, Najib is doing all the firefighting. That is the reason why Najib announced that FELDA is financing all the 91.2 million shares. He has read the writing on the wall. If he doesn’t finance the settlers, they will go up in arms. At stake are the 50 over seats in FELDA areas.

At RM4.55, FELDA will spend RM41,496,000. That’s RM41.496 million. It is a small sum to appease the 112, 635 FELDA settlers. And now has just up the ante, he says FELDA will pay all PTPTN loans of settlers’ children. We don’t know how much.

A number of inferences can be drawn from that. The fact that Najib has to continuously bribe settlers could mean support from settlers isn’t that solid. The additional fact that Najib has decided to finance the FGVH transactions and now pay for the PTPTN loans taken by settlers’ children can only mean that indeed support from the FELDA people isn’t as solid as he would want everyone believe.

Najib’s every move now reveals his true character. He hasn’t got a well thought-out plan and instead he makes it up as he goes along. I have to repeat myself: The settlers were supposed to buy the share with bank loan that came with a RM200 processing fee and a 5 per cent monthly rest. If I am not mistaken, the loan was supposed to be repaid in 6 months.

Otherwise imagine this. The settlers who have held on to their 810 shares must pay 810 x 4.55 = RM3685.50 plus RM200 processing fee. That is a total of RM3,885.50.

If they now sell at RM4.78, they earn RM3871.80. Each settler who now sells loses RM13.70.

That’s chicken feed. But RM13.70 loss represents the anger of one settler. And there are 112, 635 of them. If each settler family has 4 voting members, that will represent 450,000 angry voters.

So it is as I have said from the very beginning. FELDA and Najib were selling an abstract idea formed from illusions and unclear business strategy. It’s just paper shuffling designed in the end to enrich holders of large chunks of stock, the investment bankers, the hordes of consultants.

What new, ground-breaking businesses are offered by FGVH? Nothing other than planting more oil palm and opening up more estates. That’s, the very same business that has been done quite well by FELDA on their own without FGVH.

You change the management, tweaked here and there giving the impression that FGVH has evolved into something super. It’s all a corporate BS.

FELDA got RM10 billion. Najib gave FELDA RM5.99 billion. Where did the balance go? Most probably as promised by the FELDA CEO, the money went to the minister in charge of FELDA:  Najib himself. The PMO got almost RM4 billion to play around to implement the principal economic strategy of Najib — giving out money to buy votes and allegiance.

Let’s see how votes bought stand up against votes given because of beliefs and convictions. — sakmongkol.blogspot.com

* Sakmongkol AK47 is the nom de plume of Datuk Mohd Ariff Sabri Abdul Aziz. He was Pulau Manis assemblyman (2004-2008).

* This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insider.

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