(Aug 11): The Federal Land Development Authority (Felda) is silent after its third six-month special exemption from Bursa Malaysia for the 25% public shareholding spread in FGV Holdings Bhd expired on Aug 3 2022.

It continues to mop up more shares on the open market in an apparent attempt to privatise FGV on the cheap despite high palm oil prices and record profits.

It is learnt that Felda's shareholding in FGV stood at 82%, way off the 90% ownership to trigger the compulsory share acquisition to take the country's largest crude palm oil (CPO) producer private.

This resulted from the failed RM1.30 per share privatisation initiated by Felda in Dec 2020 and closed in March last year. Before the exercise, a rumour was floated in Oct 2020 that Felda was planning to cancel the Land Lease Agreement (LLA) with FGV and that the Cabinet had given its approval.

This rumour resulted in a further collapse of FGV share price to 70 sen.

The cancellation did not materialise and remained a rumour. In hindsight, however, it seems like an attempt to irresponsibly suppress the already low share price before the general offer.

The general offer of RM 1.30 failed as the minority shareholders rejected it together with the Pahang and Sabah governments which held substantial stakes.

A Felda spokesperson said the FGV privatisation had been an integral part of the government agency's recovery plan as drawn by the Special Task Force chaired by Tan Sri Abdul Wahid Omar.

After three exemption requests of six months each, there is still no sign of any resolution. Queries by Bursa Malaysia are also absent. Meanwhile, FGV is more concerned about pay and perk hikes for the Chairman and Board of Directors which invited a public and shareholders uproar.

With the price of palm oil high and profitability high, surely the new offer price should be tagged competitively to entice the remaining shareholders to sell their stakes in FGV.

Felda need not be ultra stingy with the minority shareholders, some of whom bought their shares during FGV's listing in 2012 at RM4.55 per share.

Former FGV chief executive officer Datuk Zakaria Arshad said privatisation might be a good move for Felda to manage its estates solely.

"From the settlers' perspective, they want to have full control or regain their control over their estates. If CPO prices rise, it would benefit us (settlers) more as we can reap the most benefit."

We, the minority shareholders of FGV, urge Felda to resolve the issue of FGV privatisation soonest and not abuse the rules and regulations of the Bursa Malaysia listing requirements.

This lack of respect for the listing rules and regulations does not bode well for the Malaysian securities industry especially with regards to GLCs seeking a listing on Bursa. Time to clean up your act, Felda management.

Minority shareholders of FGV
Kuala Lumpur
11 August 2022