I refer to the malaysiakini report Plantations' merger good business, says PM , which touched on the proposed merger of Golden Hope, Guthrie and Sime Darby plantations with our PM saying the merger is 'good business' and 'it is in line with the government's policy of increasing and expanding capacity'.

I watched a TV programme over the weekend and an expert interviewed had many reservations about the whole deal which seems to reinforce the many apprehensive views of a few authoritative personalities about the suddenness, secrecy and obvious lack of strong merits to warrant the merger.

According to the expert, one of the reasons put forward is to improve efficiency but he cannot understand how by having a bigger entity this can be done. The plantation business is still labour intensive and cannot be mechanised to a large extent. Even the possibility of lower prices for fertilisers and other materials can be done by having a subsidiary to centralise bulk purchases, this does not require a merger of the main companies. He also added that a conglomerate is not the best business model for efficiency anyway, with the exception of General Electric.

In my opinion, without further details, the outlook for minority shareholders is bleak as they are likely to be offered cash or shares in Synergy Drive without being able to stop the merger no matter how unhappy they are about the whole proposal. This is just like the recent takeover of Southern Bank by CIMB (headed by Nazir Razak, brother of Deputy Prime Minister Najib). Soon after the takeover, the rules were changed to allow target banks to negotiate with more than one party. Incidentally, this plantations merger proposal was initiated by CIMB and the political connection is too obvious to be missed.

Soon after the announcement of the proposed plantations merger, it seems even the chief executive officers of Golden Hope, Guthrie and Sime Darby were caught by surprise. Second Finance Minister Nor Mohamed Yakcop statement that it was 'market driven' was way off the facts of the matter. So far, the three companies are doing fine and there is no hint that the present set-up is detrimental to Permodalan Nasional Berhad (PNB) or the minority shareholders.

According to Khalid Ibrahim, former CEO of PNB and Kumpulan Guthrie: "First, the proposal was initiated not by one of the three companies or its substantial shareholder, PNB, but rather by an investment bank".

PNB's statement indicating they have no idea about the proposal and will have to study it first is very frightening. PNB is the major shareholder in two of the companies and has a substantial holding in the other. This calls into question PNB's ability to manage and control its assets. Surely the statement came as a shock to the more than the eight million investors in various PNB's trust funds.

It does not make sense for PNB to not know of the proposal beforehand for they not only have board representation in all three companies, but the chairman of PNB is also chairman of two of the companies involved. Khalid Ibrahim is now treasurer of Parti Rakyat Keadilan but I think his points are valid and credible.

Recently, Megat Najmuddin also hinted about the illegality of GLCs having advisors to make important decisions when the companies already have directors to do so. I take it that he meant political interference.

While the critics complained about Pak Lah's lack of direction and action, there seems to be competition between the top two leaders in taking nepotism to greater heights.