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Sakmongkol ak 47

Sunday 24 June 2012

FGV is the settlers' Road to Serfdom. (1/2)

Someone wrote that FELDA settlers will eventually become estate workers. The FGV listing is the settler’s road to serfdom.
Table 1: %age and number of shares offered for sale.
Saham2 yang di tawarkan
Jumlah saham
Saham sedia ada yg di tawarkan
1,208.9 juta
Saham baru yang di tawarkan

Table 2: allocation of FGV shares.
Jenis pembeli
Jumlah saham( Juta unit
Yang di pilih oleh MITI
Pembeli institusi
1 +2
Orang awam
Peneroka FELDA
Kakitangan FELDA


With a bottomless pit of scandals and irregularities, PM Najib must be off his rockers when he says he will win 14-0 in the next elections. He won the Raja Lawak competition in Melaka.
But I know, the only time he HAS to say something like that, is when he knows the chips are down. We know when Najib says he will win 14-0, it means UMNO and BN are finished. Otherwise, with a score of 14-0, Najib should have declared elections yesterday.
There’s a rumor in town, with the story that Najib went to see his personal doctor to examine the constitution of his brain. As you know, the brain is divided into 2 sides- the left side and the right side.  When the right side was examined- the doctor explained, I am afraid sir, nothing is right there. Momentarily disturbed, Najib asked-What about my left? I am afraid I have even more frightful news sir- there is nothing left there.
Let’s get back to the FGV listing for one more time. The initial idea was mooted by CIMB. Ethos Consulting was brought in as global project coordinator. They brought in the Calvary- Hay Group, Boston Consulting, Aeon Hewitt and maybe more. Najib’s current world is pretty much constructed by consultants at the moment. They provide him with the idea and he goes out there to promote what he thinks are earth-shattering ideas. By the way, if readers are interested to read about the make-believe world consultants construct, they may want to read House of Lies.
The FGV listing has all the hallmarks of becoming a minefield for Najib. An increasing number of FELDA people are becoming more skeptical by the day. It’s dawning on them; they are being deceived into believing that all this is done for their wellbeing.
Most of us laymen are interested to know- whether this listing will benefit FELDA settlers in the end. In the end- the UMNO people will go around town defending the listing by saying, settlers don’t lose anything. We are not touching your own landed property. Those people who are entitled to land titles will get theirs. The others, as soon as they pay up, will also get theirs. So there’s nothing to worry.
Where will the settlers sell their ffbs( fresh fruit bunches) ? The mills and crushing plants are now owned by FGV. They sell their produce there. The purchases will now be done more stringently. FGV mills will ensure the exact measure of extraction rate and also make sure; fruit bunches meet quality control requirements. The future is one with long drawn out frictions. Even at the time when FELDA owns all its mills and plants, settlers dispute with FELDA, what more when the mills and plants aren’t owned by FELDA any longer? There are always 3 areas of disputes and contests. Settler battle FELDA over issues of (1) extraction rate of FFBs (2) payments for replanting and (3) payments on felled rubber trees.
FGV will ditch the settlers in the end to avoid having to contend with these issues. Investors don’t want suppliers with issues and litigations. Settlers will no longer get any preferential treatment from FGV as it is now a purely private business. Settlers will find themselves as just one of the many suppliers.
The politically relevant point to me is the fact that FELDA people get only 5.5% of the 2.18 billion shares offered for sale. So there goes the pompous proclamation that we care for the FELDA folks. The FELDA people are going to pay for the shares. They have to pay almost RM4000 for 810 units of shares.  Good if they can get RM 3 premium per share. They make RM 2000 over profit. Can the price stay long at RM 7.55(giving them a RM 3 profit per share)?
The price stays long if the fundamentals are there. You can’t sustain the price artificially by casino-ing the market. The big boys will want to recoup what they spent quickly what more with the uncertain future of the Najib government.  They are jittery. The Singapore diplomats who witnessed firsthand the Bersih 3.0 recently wanted to verify things because they want to prepare for eventualities. They are pragmatic people who are not beholden to UMNO and BN for anything.
Because they also know how to read in between the lines. By the way, the origins of the expression `read in between the lines’ came about when the spies of George Washington wished to send messages to each other. They would write secret information in invisible ink in between the lines of normal written material. Recipients would have to apply some kind of chemical concoction to make the hidden messages visible.
So, when people read in between the lines, they see trouble in Pekan. Local folks in Pekan are up in arms because Najib’s people are bringing in thousands of new citizens in Pekan and giving them land. The natives have to wait generations to get titles to the land they applied. Every acre of land given up to the Khmers, the MYanmares and whoever, means one acre less for local people in Pekan. That means Najib does not trust Pekan people. He has reasons to because in 1999, the PAS candidate came within 241 votes of unseating Najib son of Abdul Razak.


KoSong Cafe 24 June 2012 at 09:51  

It is strange reading all the unsavoury facts about the forthcoming FGVH listing, and knowing nothing could be done to stop it.

Like Lynas, decision already made by the top, the rest (feedback and PSC) are just for trying to be politically correct.

Then we have banks breaking rules of BAFIA over sale of NPLs, with the tacit consent of the Finance Minister.

All these examples show the power of the incumbents over people who are in charge of those relevant authorities. Politically, there are those parties like MCA and Gerakan, who went along without a squeak. Our last hope is the next GE, and even this is open to fraudulent manipulation!

While the opposition leaders are worried over 'handover of power', the BN leaders are worried over rampage if the opposition were to lose. But history has shown the opposition did not (unless there are widespread and blatant cheating); and chances are greater that sore-losers (BN has much to lose) will create problems instead.

Pok Li,  24 June 2012 at 10:54  

In 2009 Najib actually lost the Pekan seat. The 241 majority came from undi pos. Then the redelienation of Pekan constituency was done to include the 2 army camps at Batu9 and Batu10 to ensure Najib is safe. As if not enough, the Malaysianisation of the Khmers, Myanmarese, Bangladeshies, Indonesians also had to be done.

bruno,  24 June 2012 at 12:35  

Dato,when the FGVH IPO finally makes it's debut,it will become a publicly listed company.That means that anyone who owns shares in the company is a shareholder.There will be no such thing as a Felda settler anymore.Shareholders only.

And there is no way for the shares to trade over RM7.50,even though the cornerstones and GLC's owned a huge chunk of the shares.I do not see it go over RM6.50.In fact I will be shocked to see it go over RM6.00

Even if the underwriters do managed to push it over there is no way the GLC's will be able to maintain it.The underwriters job is to see that the IPO price is maintained on that same day.After that they sweep the dust of their asses and balik kampong.

In my personal opinion the shares will be trading betwee RM4-5 beginning first week of August.My forecast is for CPO to trade between RM1,000-1500 for a certain period of time within the next three years.

Soon the bullmarket in commodities will be over.When they top the bottom will fall off.Just look at crude oil.At the peak it was trading at around 150.Six weeks ago it was around 100.Today it is around 80.

Many people hoping to get rich,including our good friend QD will be very dissapointed.They will be very lucky if they do not lose their pants,that is if they hang on hloding the shares for too long.

bruno,  24 June 2012 at 12:47  

Dato,if the FGVH shares bite the dust sooner than later,even five thousand Burmy,Myanese and Kymers will not be able to save the hide of Najib.He might have to add another 15k to win by a minority.

Anonymous,  24 June 2012 at 14:14  

People are NOT against IPO or other ventures - it has many benefits too.

But be fair from the start....take proper care of the settlers and their families as first priority who worked on the land for 50 years and the rest of us can play/invest in the stockmarket.

cui bono?,  24 June 2012 at 17:14  

Dato, someone just posted this link in another Blog. This supports neatly your Addendum to Hayek's Road to Serfdom:

I just can't get over this fact. Some people slog for 50 years and others, complete strangers, come in
breaking as many rules as possible and award themselves 94.5% of the business at the same price!

After reading the piece by Profundo, I am not too sure whether it is the low road to serfdom or the lower road to oblivion - the settlers may lose everything except for the grand Rm15,000 gift from UMNO.

Kutu Kampung,  24 June 2012 at 17:30  

Another grand example of grand theft of how virulent capitalism has robbed, disenfranchised citizens - all their property and land will pass away to others when life for the settlers become difficult by situations the crooks create.

On a large scale UMNO have done this ...yes SAK, the party you once upheld and once you would have died for... and they are parasites ...UMNO leaders are parasites.

Now you got to set the record straight outside of UMNO like those others who did like you.

Itu satu Ku Li sama lah macam dia orang ...bantu UMNO menang !!! :roll:

Anonymous,  24 June 2012 at 19:25  

I like your title. In fact the Malays have already been in serfdom under UMNO for over half a decade.
Don't you think so?

bruno,  24 June 2012 at 19:47  

Dato,the FGVH IPO has all the hype to be a sellout Bieber concert.With all the teenage girls screaming their lungs out as what a succesful teenage star should be,the FGVH IPO will dissapoint many including the architects of the scheme.

It has all the star power lined up because Etho's was one of the main principal consultants.Etho's had the ear of Najib because Omar Ong being like a godson to the Dr,was put under the charge of Najib.And Najib had to make Omar look good to please the Dr.

And so Omar Ong has to make Najib look good to prove to the Dr that he can be a proud godfather.But all this sideshow will be unrattled when the FGVH IPO turned out to be a roadshow flop.Why it is called a flop.

First,with all the hype of the support,lining up of cornerstone investors,state gomens and GLC's taking up a huge chunk of the shares in the corner of FGVH plus some from the Isa gang(Felda).So we can safely say that 75% or more of the shares will be tied up,and not be available on the trading block.

That is why the expectations of the IPO doing so well,that mostly those subscribing to the shares hope to have their names drawn up in the lottery,and able to make a killing.Even our buddy QD is already counting the chickens,waiting to sell so that he can have a free holiday,travelling half the world to visit his gramps and nanna.

So because of the high expectations,anything less than RM 7.50 will be considered a real dissapointment,especially by those in the QD camp,staunch believers of Umnoromics(pronounced as Um-moronics)So after the first day of trading if the shares were to closed below RM6.50,it would be considered a flop.

So what if the shares were to closed between RM5-6.It will be considered a triple flop by the QD camp.Under RM5?A fallout of bed,a total failure,unbelievable.

Anonymous,  24 June 2012 at 21:25  

Your arguments and analysis make sense but does it serve any purpose? I guess 99.9% of the readers are from urban areas and non Felda settlers.

Did your messages reach them? If it did, does it make sense to them? What can they do?

Anonymous,  24 June 2012 at 23:19  

dato sak,Pls investigate into the felda+ Iffco(alana) relationship...There's something for you to uncover...FYI,Felda is letting Iffco to manage their refineries/ port kelang/Pasir gudang + Batam+ China...Iffco,do not hv to cough out much funds..They are given below market prices/paid commission to market for Felda...Iffco is also not required to subscribe any shares in FGV...!!!...All these have been arranged by Najib/Zahid/Muhiddeen...!!!...

cui bono?,  25 June 2012 at 02:21  

Dato, you wrote, "... Where will the settlers sell their ffbs( fresh fruit bunches) ? The mills and crushing plants are now owned by FGV.... The purchases will now be done more stringently. FGV mills will ensure the exact measure of extraction rate and also make sure fruit bunches meet quality control requirements... The future is one with long drawn out frictions...,and 3 areas of disputes and contests.....FGV will ditch the settlers in the end to avoid having to contend with these issues.

The whole drift of your arguments is that at the end of the day it is about FGV making the highest possible profit so that this profit will be distributed accordingly, i.e. pro-rata, with settlers getting to celebrate their 2.5% ownership of the total, if and only if there's profit to be distributed. Compare this to what the settlers have been receiving in the past every year without fail, this listing exercise must be, in my view, the mother of all con games. At whatever price on the day of listing, the settlers are still the losers: they lose simply because their inherent ownership of an essentially small private enterprise has been forcibly combined with others of the same kind to create an illusionary giant such that they cannot claim ownership anymore because of a simple administrative device - theoretical market value, and this then allows all the predators from the cities to swarm and overwhelm the settlers to buy up an incredible 94.5%. Where is UMNO's conscience and what kind of heart beat in their members body?

Tun Razak and Tan Sri Taib Andak were the founding fathers of the world's first definitive success story in uplifting the rural community, and who is doing the definitive deconstruction of a unique Malaysian achievement?

In late February this year Singapore listed palm oil giant Wilmar International Ltd (40% owned by Robert Kuok and nephew, Kuok Khoon Hong)was reported to have S$4 billion in market capitalisation wiped out as a result of a 10.9% market slide on Wednesday 22nd February. Wilmar is considered Asia's largest agri-commodity trader, and in ' earnings briefing, Wilmar singled out the "disadvantaged position" Malaysian refiners were in - due to Indonesian's export duty cut for oil palm products in October 2011 - as one of the reasons for its weak refining margins in 4Q2011.';(The Edge Malaysia 27 Feb 2012 refers).

Who suffers most when market fall or collapse?

Quiet Despair,  25 June 2012 at 07:45  

Best buddy Bruno

Bad-mouthing me, eh. You have carte blanche from me. I still love ya. Muahs.
I can't help being generous in my love since I am so happy. So elated Italy won. I am on a high for the Azzuris. Anything but England. Just like anything but Anu-War Bin Ibrahim.ABABI
Blue is for BN and red for UMNO. Yes both colors will be flying high.
Sakmongkol, what Najib said about trashing the opponents with a 14-0 victory is so true.
We will indeed see it.
And roll on Friday. It will be bullish, bullish, bullish. And I will be jubilant, jubilant, jubilant.
Please don't rain on my parade, you prophets of doom. Just like the sun has set on the United (ic) Kingdom, it will also set on Pakatan.
P.S. Have not slept a wink after the Italy victory. I am all set for a fruitful day.Just like the Felda oil palm, ready for a bumperful harvest to conquer the world.

Anonymous,  25 June 2012 at 07:55  

To be honest - such a selling out of Felda was going to happen sooner or later. The Felda scheme do not have a long term future - palm oil farming is a large scale industrial business.

But why it has to be sold out this way is simply treasonous to the Felda settlers. There is no reason why the yields and performance of Felda could not be raised competitiely BEFORE its being sold. by all estimate, if the performance was competitive, the company could be worth several times more - forget RM15K per family - if it had been done right - we are talking RM hundred of thousands per family that could have guaranteed the aging farmers at least retirement would be secured.

Anonymous,  27 June 2012 at 19:31  

I have said here before and will say it again, the listing exercise is daylight robbery from the very beginning. It has nothning to do with serving the settlerss interests but everything to do with serfing them forever. It was as clear as broad daylight and I understand ANAK has been fighting against the listing for over a year but majority of settlers just dont want to listen to good logic. To make matters worse, all those intellects Bumiputra out there make comments like some expert but dont know what the hell they were talking about when you read their statement, incl some who posted here previously. I'm not a settler and am not Malay and yet I'm angry at the way the whole thing was concocted to swindle poor innocent settlers. I had even voiced my concern to Malay taxi drivers who have freinds or relatives as settlers but I was insulted and accused of being rascist. 30 years of Mahathirism had whitewashed the rational thinking Malays and if not for Pakatan, every race in this country will be shackled for much longer. For those fence sitters who think they're so cool, the argument is simple, the stakes are just to high for the powers that be to lose power. Dont even think for a second that a Tiger can lose its stripes.

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