Copyright Notice

All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the author, except in the case of brief quotations embodied in critical reviews and certain other non-commercial uses permitted by copyright law. For permission requests, write to the author, at the address below.

Sakmongkol ak 47

Friday, 9 March 2012

The unconscionable FGV listing

How can we agree to the idea of allowing a smaller business unit that has been making losses for 5 years in a row to take over Felda Holdings? That can only mean it has made serious errors in judgment, careless, wrong businesses to go into and incompetent. Any other lesser known bumiputera would have his ass kicked by a lending institution.
We are treating FGV with the reverence it doesn’t deserve. That’s what FGV is asking to be allowed to do. Transfer the 51% equity belonging to KPF in Felda Holdings, to FGV and then FGV puts up a listing proposal.
FGV has been making losses during 5 consecutive years. We don’t know how much it lost because Felda has not been forthcoming and candid to the PM. The PM doesn’t ask penetrating questions because as he admits, he will speak and debate with responsible only. So, the responsible people are those who tell him what pleases his ears. The felda CEO will tell him we lost a manageable RM 500 million. Felda people tell me, the losses are near RM 2 billion.
How come it made losses? Maybe they chose the wrong business fields. Maybe because they are incompetent. Whatever the reasons are for the accumulated losses, these placed FGV in a weak position to propose a listing with it as leader.
The settlers through their cooperative KPF own 51% of Felda Holding, the arm that actually makes money through a wide variety of businesses.  Through its subsidiary, Felda Plantations, it manages and operates the 360,000 hectares of oil palm estates. They probably earn RM 300 million a year in management fees. Some will go to Felda Plantations; the bulk goes to Felda Holdings.
Felda Holding is the pot of gold. It has more than 70 mills which process the FFB yielding around RM 2 billion a year for Felda Holdings. It has refineries. It has its Felda agricultural services which do research and produce some of the best palm seedlings and plants. FAS probably contribute another RM 500 million to Felda Holdings. Felda Holdings is a conglomerate in itself. Felda Palm Industries own and operate the palm oil mills and refineries we mentioned above. It has business in engineering which is responsible for the construction of facilities; it has business units dealing in rubber, in computers etc.
How much money do these generate? Maybe 4 billion a year.
So this mother lode, the main source of revenue earner is what Felda settlers are surrendering. If they participate in FGV, this 51% will be exchanged for shares in FGV, and that 51% will translate to about 38% in the enlarged FGV. So we then need to ask, will income from holding this 38% exceed the current 51% in Felda Holdings?
The answer is that it’s unlikely because FGV is going to use money raised from the IPO and future retained earnings from plantations to go downstream into oleo chemicals like IOI Corporation, Wilmar International and KLK, the companies that FGV is trying to emulate. But if we look into the published accounts of these companies we can see that they all get far higher returns from plantations (upstream) than in downstream manufacturing. This means that Felda settlers will get less dividends in the future.
Will settlers lose control? Yes, they will lose control of Felda Holdings, the main cash cow, and their 38% in FGV won’t give them outright control. Besides, if they also throw in their land holdings by granting 99-year leases, that land is also gone for 4 generations, a very long time.
That will also mean that Felda will be deprived of some RM 2.5 billion funds thus curtailing it from carrying out welfare work in Felda settlements. Who will compensate for the funds? FGV which is going to run on pure business merits will never set aside money for felda to carry out its social and welfare obligations. FGV thinks the current spending on these unproductive but socially desirable as wasteful.
What it doesn’t think as wasteful are
Eksekutif2 baru ini diberikan gaji yg sangat lumayan sehingga menjangkau RM50,000seorang sebulan (tidak termasuk ealun). Selain itu, kerja2 mudah pentadbiran umpama penganjuran majlis pesaraan kakitangan (sebagai contoh)diserah kepada perunding luar...kononnya org Felda tak reti buat kerja...
Dato' tau tak dari mana gaji2 ini dibayar....tidak lain melainkan diambil dari kantung anak2 syarikat FHB iaitu secara mengenakan Management Fee yg maha tinggi....saya tak pasti KPF (pemilik majoriti FHB) perasan atau tidak akan hal ini...wallahu'alam.

What about the “windfall”? We don’t know exactly what this is, how much it amounts to, but we know where it’s coming from. Its coming from the portion of profit share which felda will get. We won’t know how much yet. But we also need to know, that a portion of its share of profits will be used to pay off the RM 3 billion loan Felda took. Yes sir, Felda did take loans from EPF which is our money.
The windfall will be pure cash that Felda makes from the listing by selling some of the FGV shares that the government (through FELDA corporation, the statutory body under PM’s Dept.) will receive for pumping into FGV its 49% in Felda Holding and also the 360,000 hectares that FELDA Corporation ie government owns. The bigger portion from the listing will go the PM’s department. That is the main reason I suspect, the present PM is also pushing for the FGV listing. He needs the money to play the role he most relishes- Santa Claus. So when he gives the money from Felda’s portion of the IPO profits, what do we call the windfall?  You can call it by the only name it has- a monetary inducement is pure bribery to get the settlers to agree to the IPO, and doubly devious in view of the GE.
Whatever has happened to the original Felda vision, to open land to help the landless poor? It is now going into big business that the settlers don’t understand, can’t control, and makes less money than planting oil palms and making CPO.
That brings me to what Ahmad Maslan, the second rate spokesman for Felda affairs said. If the 360,000 hectares of land are given to second generation settlers, Felda will not get as much money as it can. You see, when the states alienated the land under the terms of the GSA, that land was supposed to be distributed among applicants. That was the reason why states gave up land to Felda in the first place.
The cardinal principle has always been that the best people to handle money are we ourselves. The direct comparison in the context of GSA land- which is a money making resource, is that the best person to handle the land would be the settlers themselves. Why wouldn’t we agree to distribute the 360,000 hectares of land to 120,000 landless people and give them dignity to make good from the money making resource?
So, is this IPO good for the settlers? This is another test for the settlers, mostly Malays. Should they fall for the immediate temptation of the windfall, and sacrifice control and future higher returns? Should they stick with doing things they understand or go into businesses they know nothing about? The government has discarded the original Felda dream. But the settlers can, if they choose, keep it alive by voting UMNO and BN out of office.


Anonymous,  9 March 2012 at 14:53  

Ha ha ha..

Can they Thanking You Tun Razak or Thanking You JIB AH GOR...ha ha ha..Are Thanking Tun Razak is the same as Thanking JIB AH GOR?..ha ha ha.

It is Settlers choice!! Ha ha ha

Donplaypuks® 9 March 2012 at 15:25  

"The PM doesn’t ask penetrating questions.."

Damn right too. After all, he's the one who forced them to invest overseas to generate the $2 billion losses.

There is a very, very clear pattern here.

The Sime Darby-Golden Hope-Guthrie merger suckcessfully absorbed $3 billion of Sime's disastrous losses in the Middle East. That party is still not quite over yet.

That merger was conjured up by the 4th floor boys and CIMB (controlled by you-know-who) which was paid over $500 million in merchant bank fees.

Today SD's price per share is still below RM10 while the combined pre-merger price was about $25!! Yet, SD's ex-CEO and still Chairman Black Musang claimed the merger was "Suckcesspool." As no doubt Najib will if the Felda listing goes through to swallow up $2 billion + operating losses not to mention another $ billion or two of investment write-offs!

Mass Piratisation, here we come!


we are all of 1 Race, the HUman Race

Anonymous,  9 March 2012 at 15:35  

This is another test for the settlers, mostly Malays. Should they fall for the immediate temptation of the windfall, and sacrifice control and future higher returns?

Unfortunately, Malays prefer to live in the present. Just take a look at their savings rate.

The future previously they leave to God; although now they leave it to UMNO!

If this listing gets through, the settlers will be thrilled getting the durian runtuh. Whatever resistance or reservation they have, will be swept away. With his bag replenished, Santa Najib will be much sought after for the gifts that he bear. The Malay's short-term euphoria will be translated into votes in this coming GE.

Can PAS-PR make the Malays come to their senses ??

Anonymous,  9 March 2012 at 20:16  

itu dia punya bapak punya kompeni.

bruno,  9 March 2012 at 22:58  

Dato,you have been too nice and kind to these Umno thugs,robbers and rapists with your words."Any other lesser known bumiputra would have his ass kick by a lending institution".

"Any other lesser known bumiputra would have his dick tied with barb wire,hanged to a flagpole in People's Square,stark naked for all to see" would be better put.For starters how about Isa Samad and the people in the PM's department all the way up to Jibby.

bruno,  9 March 2012 at 23:41  

Dato,in the case of master loser FGV taking over profitable Felda is like a rat gobbling up a cow.A python gobbling up a cow one can understand,but a rat?

The takeover of Felda by FGV and eventually to the public listing is first to cover up,the losses incurred by FGV.The rumours were in billions,but so far FGV has admitted that it is about half a billion.Half A billion ringgit losses coming out from the leeches mouths,we have to take the rumours at face value.

This is a replay of the BNM forex losses.The buying of MAS shares by Tajuddin from BNM as said by him, as instructed by Dr Mahathir was to relieved BNM of the cash crunch incurred by the BNM forex losses.A cover up of the losses.But the chicks have to come out of the eggs in the hatchery someday.

When the chicks finally came out,some smart asses came out to say that it was paper losses only.Forex or futures trading is a net sum zero game.A loss is a loss.There is no such thing as paper losses,kawan.Go back to kindergarden if you do not understand the game.

Second the rest of the money from the listing will be used for the upcoming GE,with some stashed away for a rainy day.Maybe to build palaces in Zimbabwe,stocking it with the best cognacs and champange.Buying crates of expensive shoes topping it off with containers of Berkin handbags.

If this was a legitimate business takeover,there wouldn't be all the fuss.Even against the Felda settlers will and resistance,the people in power are pushing for the takeover to go through.This type of daylight robbery behaviour can only happen in undemocratic or third world countries.Is the Umno/BN trying to push the country backwards in time.

bruno,  10 March 2012 at 00:44  

Dato,one thing I have been trying to figure out is how Felda crop yields are way below the private sectors.With University Pertanian churning out better high yielding seedlings,how can the Felda settlers lose out to the private sector.

As far as I know when Anwar was in the cabinet,one ariculture officer in charge of the Bukit Mertajam district was distributing fertilisers or insectisides to any farmers like Santa Claus.Be it for vegetables,fruits to rubber trees.

Any body who can produced proof that they are farmers can have what they want.He was getting screwed by his bosses for having bags of fertilizers stacked eight feet high,with no where to go.And all these was free,no money changing hands.That was about twenty five to thirty years ago.

Could it be that they are shortchanged when weighing in their harvests or being paid well below market prices.It cannot be because they were supplied with inferior seedlings or fertilisers.

And the hardworking settlers cannot be that unproductive as the workers hired in the private sectors because they are toiling their own lands.Maybe the settlers are being screwed for the last two to three decades without realising it.The only thing with the FGV listing is it being the last and final big screwing the settlers are going to get,before the curtains come down.

Anonymous,  10 March 2012 at 09:45  

My uncle owns ten acres planted with oil palm and earns a decent income and more importantly, he is INDEPENDENT! If the settlers own their land in FELDA it would be foolish to sign over the ownership to FGV and lose control forever. The Malays should emulate the Chinese to have an independent streak in them and never lose control over their property.

Anonymous,  10 March 2012 at 19:35  

the plundering cukture is part of bn omno style> see mas to pkfz to cow gate>> what is left??

Anonymous,  16 March 2012 at 08:52  

I keep wondering why ANAK has not forced an INDEPENDENT FULL DUE DILLIGENCE ON FGV? FGV is suppose to the partner-investee for this listing. The should force KPF to pay for a world standard independent full due dilligence that will reveal everything they need...

  © Blogger templates Newspaper III by 2008

Back to TOP