At the last AGM of the Company held on 28 August 2015, the Board of Directors of the Company (‘the Board”) has received queries from minority shareholders on the consent granted and the rational by the Company to allow BRSB to construct the said 2.2 km part. This said 2.2 km part is a high quality 40-meter-wide two-lane dual carriage-way road.  

The Board would like to present the following facts on the arrangement between Gejati and BRSB in order to clearly reply to all shareholders on the queries raised by certain minority shareholders.

Consent To Construct Access Road Through Thangamallay Estate

BRSB, via a letter dated sometime in 2012, submitted a request to Gejati for consent to construct the said 2.2 km part based on BRSB’s layout plan and upcoming surrounding area’s development together with multi-highway connection consistent to the requirement of the local authority (namely the Majlis Daerah Kuala Langat) which is near identical to the intended layout plan of Gejati’s 644 acres grounds (including a necessary two-lane dual carriage-way road in the event of SAB converting the 644 acres into property development when SAB deems timely). 

The Board, via its board meeting held sometime in 2012, had approved the request from BRSB based on the following considerations: -

1. The construction and maintenance costs of the said 2.2 km part are to be borne by BRSB;
2. The said 2.2 km part was to be aligned with the future necessary two-lane dual carriage-way road of Gejati’s 644 acres grounds intended layout plan which was approved by the local authorities on 31 March 2009 (for the northern parcel);
3. The said 2.2 km part is situated along the boundary parallel to the TNB High Tension Cables of the said estate land; and
4. This said 2.2 part being allowed to be constructed in the long term, will enhance the connectivity of Thangamallay Estates not only to Bandar Rimbayu development but also connected to major areas through the nearby highways including the Lebuhraya Shah Alam (KESAS), Lebuhraya Kemuning – Shah Alam (LKSA), Expressway Lingkaran Tengah (ELITE), the South Klang Valley Expressway (SKVE) and the future West Coast Expressway (WCE).           

Based on the above facts, the Board believed that the connectivity for the 644 acres brought about by the 9.0 km multi-connectivity access road truly benefits the Company and is in line with the Company’s long term strategy. 

Understanding between Gejati and BRSB

Besides the consent been given by the Board and the construction and maintenance costs to be borne by BRSB, all other terms and conditions are still being negotiated. This indicates the strong working relationship, built on goodwill, between Gejati, BRSB and likely other property development project owners in the neighboring area. Once the terms and conditions are mutually agreed upon and finalized, it will thereafter be translated into a formal agreement.

Restriction on the Access Road

As at the date of this announcement, there is no any restrictions imposed on said 2.2 km part by BRSB and there is no caveat lodged as per shown by our latest land search dated 25 May 2016.

Legal Ownership of the Access Road

As at the date of this announcement, the legal ownership of the 2.2 km part of a 9.0 km access road constructed by BRSB belongs to Gejati as the construction is fixed onto the 644 acres land. This is reconfirmed via a written legal opinion dated 15 August 2016 from the Company’s legal adviser, Messrs. Lim Kian Leong & Co.

The said 2.2 km part will eventually be surrendered to the local authorities.

SAB’s Long Term Strategy Plan

The main objective of the Board is to improve the value of the Company’s assets over the long term which naturally translates to a long term growing shareholders’ value.

Currently the Board is desirous of strengthening its two (2) existing long term core businesses: -

• Palm oil oleochemical products manufacturing and exporting; and
• Palm oil milling and oil palm estate operating (in the province of Riau, Indonesia)

which are facing changing environmental challenges.

The Board is of the view that it is not timely for the Company to venture into property development.

The Board believes in maintaining long term growth for all stakeholders.

This announcement is dated 23 August 2016.