FGV listing: Settlers, Felda lose RM8.8bil via land lease
As the proposed listing of Felda Global Ventures Berhad (FGV) approaches, more questions have emerged as DAP today accused the government of ripping off RM8.8 billion from settlers’ corporation Koperasi Permodalan Felda (KPF) and the Felda statutory body.
As the proposed listing of Felda Global Ventures Berhad (FGV) approaches, more questions have emerged as DAP today accused the government of ripping off RM8.8 billion from settlers’ corporation Koperasi Permodalan Felda (KPF) and the Felda statutory body.
Petaling Jaya Utara MP Tony Pua (
right
) said prior to 2011, Felda allowed the KPF to manage its 355,864 hectares of land via Felda Holding Berhad (FHB), in which the cooperative held 51 percent of the stakes while the remainder was owned by Felda.
The mass land banks were however leased out by Felda in January to FGV on a 99-year grant; before Felda chairperson Mohd Isa Samad announced last month that KPF would not be involved in the listing exercise.
Pua said this essentially cannibalised KPF’s existing business and income.
“The 355.864 hectares of land has generated RM680 million in net profit to FHB in 2011. The net profit attribute to KPF-Felda would be RM510.01 million based on KPF’s 51 percent ownership of FHB.
“Given the proposed price of RM4.65 per FGVH share on a market valuation of 16 to 17 times earnings, KPF’s stake in the above plantation land contributed as much as RM8.8 billion to FGV’s market capitalisation,” he said at a press conference today.
He added that the government’s windfall to settlers, amounting to RM15,000 each, certainly does not make up for the loss of profits to KPF over the next 99 years.
The exclusion of KPF in FGVH’s listing came after the cooperative cancelled its extraordinary meeting (EGM) originally scheduled on April 22 following a temporary court order obtained by PAS-linked NGO Anak.
Anak, a self-proclaimed representative of the children of Felda settlers, has been resisting the listing exercise, claiming that it will compromise the settlers’ interests.
Land leased at ‘dirt-cheap price’
When asked about his stance on this issue, as the land’s value will only soar to RM8.8 billion after being listed to sustain his claims, Pua said this can be done without FGV.
“KPF can do the listing themselves. If (the land) is worth that much, it is still worth that much. They don’t need to transfer (the land) to FGVH,” he said.
Pua also claimed that the government is short-changing Felda by leasing the land at a “dirt-cheap price” of RM1,490 per hectare or RM530 million annually.
Comparing this to Al-Hadharah Boustead Plantation REIT which receives an average rental of RM3,358 per hectare for its plantations lands, he said Felda loses RM1,110 per hectare every year.
“Even taking into account the 20 percent lower yield from the Felda land, which is 16 tonnes per hectare (MT/ha) compared to 20 MT/ha, the market price for leasing that land should be at least RM2,600 per hectare,” he claimed.
He alleged that Felda is set to lose RM394 million annually and RM39 billion over the next 99 years, before taking into account any upward revision in market rental rates.
‘Felda to raise money for GE?’
On the top of that, Pua also raised suspicions about the government’s attempt to generate funds by selling their 40 percent stakes in the Felda statutory body to FGV and the issuance of new shares via an initial public offering (IPO), which worth RM5.6 billion and RM4.6 billion respectively.
“Why are they raising so much money, if not for the benefits of settlers?” he asked.
He said that although the IPO money belongs to FGV, a fraction of it will still go into repaying the debts FGV owes to the government.
Asked whether he agreed with market rumours that predict a general election after FGV was listed, he gave a non-committal answer.
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