Pirates of PNG

Pirates of the South Seas

Pirates of the South Seas

The controversies of the ‘doubtful Ph.D from Warnborough University’ and ‘Yunnan Huijia deal’ still very much the talk of town whenever the subject of FGV is brought up in any Klang Valleyite conversations. Now, it seems there is a new scandal if not unscrupulous acts of executive decision.

It was brought to our attention the designated incoming CEO Pradeeb Kumar n.k.a. Emir Mavani and his able assistants imported from PEMANDU probably have been extremely busy pushing if not ‘forcing’ their Papua New Guinea proposal through the investment committee and the BOD of FGV.

Strong rumours lurk within the industry that they have unilaterally resolved ahead of all other upstream plantation investments, FGV should value the PNG proposal at USD 110 million and acquire 70% of it from its vendors. It is also believed that they also have keen support from an Investment Committee member who happily volunteered himself to negotiate on behalf of the company and management.

Nevermind that the said committee member is breaching all norms of corporate governance by accepting to negotiate on behalf of the company and then participating in the investment committee process to evaluate the merits of the investment.

The “Thirteen Million Plus Ringgit questions” are why in Papua New Guinea and most of all, agreeing at that said price. The simplified answer it is because it’s value for money. However, it is not advantageous towards FGV but to the vendors. Also definitely to individuals with vested interest and would make personal gains from the deal.

It is very clear why it is value for money for some personalities with vested interest worked very hard to push for the deal through, in so short of time.

For one, 11,500 hectares of unplanted afore mentioned land is in the boondocks of a remote island called New Britain. It is valued and offered to be sold to FGV for the bargain sum of RM 9,600 per hectare. On its own, that could be considered a value for money acquisition. However considering a Malaysian plantations plc Kuala Lumpur Kepong Bhd (KLK) bought their land in PNG last year and it cost them a lot less, at only RM 1,500 per hectare.

Probably some cheeky odd fellows could argue that KLK’s land wasn’t any good. That would rationalise why KLK paid too little. Then again USD 35 million for only 11,500 hectares of unplanted land is definitely a good value.

Then there is also the beautiful virgin jungle around the area which the company can later plant with Oil Palm. So much potential. No need to worry about the NGOs in Papua New Guinea. People everywhere is this age wants development. Then again after they log and extract the timber, they can plant oil palm and make it productive.

The next interesting question is that, FGV is into oil palm plantations. So, FGV needs to de-forest and clear the virgin equator thick jungle before they could prepare the land for estate plantation. FGV is in great luck because the vendors will do that. Nevermind they would make money from it.

It could be argued that the vendors are doing FGV a favour. Nevermind that is actually to perpetuate their logging concession licence the Vendors are required by the terms of their land deed to plant oil palm.

Also, it’s already partially planted. More or less 4,200 hectares are already planted. That planted area has also been valued by Crowe Horwarth (appointed by Pradeep Kumar n.k.a. Emir Mavani and the PEMANDUettes) for USD 75 million. That is only USD 18,000 per hectare or RM 55,000 per hectare for a 3.5 years old plantation of oil palm.

As for comparison, JCorp subsidiary Kulim Bhd’s plantation in New Britain must be valued more than that. For the record, Kulim’s acquisition was between USD 1,000-1,200 per hectare and transacated slight overly a year ago. Nevermind there is no mill, FGV can spend the USD 30 million to build that necessary facility.

In sundry, Malaysian Anti Corruption Commission should serious look into all these alleged due processes and decisions made and acts of executive decision within FGV and get cracking.

All aggregated, for the tidy sum of USD 110 million. This is the new major activity M & A that FGV can look forward to under Pradeep Kumar n.k.a. Emir Mavani. That Ph.D in ‘Government Reforms’ from Warnborough University must have been worth it. The smartest person in the world couple with the PEMANDUettes will be running FGV.

Interesting enough, in a small event yesterday at FGV Emir Mavani politely asked outgoing FGV Group CEO Tan Sri Sabri Ahmad as ‘Dr.’. Probably now he would want to be called ‘Captain’. Just like Jack Sparrow or Black Beard.

For the benefit of the stiff readers and humor bone deficcient, the MACC officers need not to investigate for secret desire to be called ‘Captain’.

Published in: on June 25, 2013 at 09:30  Comments (23)