Asset enrichment

fgv
At the juncture where FGV refused to continue in underwriting medical and hospitalisation bills of gravely ill former FGV Group President and CEO Tan Sri Sabri Ahmad by summarily terminating him from all BoD posts within the FGV Group, there is this damning report about the high value acquisition of multiple non-plantation businesses.
19 Dzulka’edah 1434 H | 25 September 2013
 Only in this site

FGVH’s spending on assets but not settlers raises suspicion

Harakahdaily – TS, 23 September 2013

Sept 23: The RM4.4 billion raised from the initial public offering (IPO) of Felda Global Venture Holding (FGV) has come under scrutiny following several questionable purchases amid the absence of allocation for settlers’ replantation activities.

“Although the figure is big, we see that not a single sen is allocated for replanting activities, and this will give a big problem for Felda in the future,” said PAS economist advisor Rosli Yaakop.

Felda and its 39 percent-owned subsidiary FGV had recently went on a shopping spree, forking RM500 million to acquire Grand Plaza Service Apartments in London, technology house Iris Corp at RM110 million and Grand Borneo Hotel di Kota Kinabalu at RM86 million.

Felda chairman Isa Samad had argued that FGV must diversify its portfolio instead of relying its life on international crude palm oil market.

Last June, Isa said that the proceeds from the IPO had shrunk to RM3.8 billion as at March 2013.

Of the RM3.8 billion, he said RM2.2 billion was allocated to acquire plantation assets, RM840 million to buy selective mills and refineries, RM780 million to expand Felda’s oils and fats downstream segment, RM41 million for capital expenditure and the remainder for loan repayments and other.

Meanwhile, Rosli said it was likely that FGV had exhausted the fund raised from IPO on the purchases without allocating anything for replanting works – a vital move to over FGV’s greatest challenge – to overcome its aging ‘Palm Age Profile’.

It was earlier revealed that 53 percent of Felda’s palm trees are aged 20 years and above, failing the market’s standard of 7 percent.

From the various investments especially in the hotel industry, Rosli said Felda has deviated from its original goal to uplift the Bumiputeras.

According to Kinibiz, Felda Investment Corporation, the newly established Felda’s investment arm has been tasked to take charge of its shareholdings, and manage its eight hotel properties spread out across Perak, Terengganu, Negeri Sembilan, Sabah, and London.

*******************

This serviced apartment acquisition in West End isn’t actually premier brand. Unless, the game is about strategically book building for this hospitality business. Probably, the acquisition of property at the area at these bullish times for property isn’t the best option do a high value ROI exercise.

Then again, FGV should not actively in hospitality business because at the very least, they don’t have the competency for it.

This is on top of following through the controversial acquisition of 16,000ha Pontian Plantations Bhd. in East Sabah, at the price of RM140 per share which is at 30.7 times PE ratio.

FGVH secures 98.81% of Pontian United Plantations

Posted on 18 September 2013 – 05:38am

PETALING JAYA (Sept 18, 2013): Felda Global Ventures Holdings Bhd (FGVH) has succeeded in its RM1.2 billion bid for unlisted Pontian United Plantations Bhd, securing 98.81% of the latter as at last Friday, despite earlier reports which poured cold water on the deal.

In a filing with Bursa Malaysia yesterday, FGVH said it has sent a notice to shareholders to inform them that it received valid acceptances of not less than nine-tenths of the Pontian shares as at Sept 13, 2013, enabling it to compulsorily acquire the remaining shares.

FGVH has extended the closing date of the offer from yesterday to Oct 1, 2013. The offer details remain unchanged.

FGVH on July 18 this year launched a voluntary conditional takeover offer for all Pontian shares, offering RM140 for each share. Given the fragmented shareholding structure of Pontian, with over 30% of the company’s shares held by four different shareholders, market analysts were not optimistic that the deal would go through.

******************

The Chairman of Pontian Plantations Bhd. is DAP Life Adviser and Former Chairman Dr. Chen Man Hin. It has been argued that the price proposed for the acquisition of Pontian Plantations is exorbitant, which is what above what a shareholder TSH Resources was willing pay exactly the same time last year.

FGV has yet to justify and rationalise all these acquisitions, especially at the price it was paid and how the group business could benefit. At the moment, it would take FGV at least 31 years to recover back the investment at the value they paid for it.

Failure, would just brought forth speculations that there are something dubious in the part or manipulation in the process of valuation, rationalisation and acquisition of these assets. Considering that the AGM is expected to be middle of nest year, where shareholders could raise all these matters.

Especially in the tone where the reputation of FGV Chairman Tan Sri Isa Samad has not entirely been percepived as someone is who ‘clean’. He was once found guilty of ‘money politics’ for seven charges by UMNO Disciplinary Board, during the contest for Vice President post in party elections of  2004. Isa’s UMNO Vice Presidency was stripped and he was suspended for six years. Later, the suspension was commuted to three years.

Then again FGV CEO Emir Mavani is someone who has not been perceived as with impeccable integrity.

There is also this damning rumour in the market about the proposed acquisition of New Britain plantations off Papua New Guinea. The story is about three personalities, which include a member of the investment committee which expected to make USD10 million from the deal had it went through.

It is very important all these rumours and ‘market talk’  are quashed with transparency about he proposed and eventual acquisition. Probably MACC could also do necessary investigations, to ensure that all these acquisitions are in accordance with proper procedure.

Asset acquisition is meant to strategically enrich FGV. Not individuals, especially when they are paid to served the interest of FGV from within.

*Updated 1000hrs

Published in: on September 26, 2013 at 02:00  Comments (21)  

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21 CommentsLeave a comment

  1. […] The “thirteen million plus Ringgit” guy rambles…. […]

    • Tangkap je Isa Samad dan keing Emir MAvani. Jelas sekali ini bertentangan dengan akta Felda.
      1.2 juta TUNAI untuk Pontian mengkayakan Cina. Dan hotel-hotel Cina dibeli denganTUNAI hanya memperkayakan lagi Cina.
      Dengan tunai 1.2 billion mereka boleh buka lagi ladang dan lawan balek Felda dan menjatuhkan harga kelapa sawait dengan lambakan tanpa kawalan.
      Najib dungu..

  2. “Probably MACC could also do necessary investigations, to ensure that all these acquisitions are in accordance with proper procedure.”

    More than “Probably”. They must. Indeed they must, as Najib said in San Francisco that he wants to tackle corruption – or was it just for the overseas audience?

    One gets the impression not much is being done by MACC. Not much news of big fish prosecution after Ling Leong Sik. Even Ling’s case fizzled out and the charges didn’t stick, did they? What the hell is happening to this country? Even the Deputy Public Prosecutor prosecuting the Anwar Al Juburi Sodomy II case lost – nothing wrong with that, but the bloke turned up defending Anwar Al Juburi on another case not long after that.

    And then the Chief Justice announced that retired Judges can also be defence lawyers – is that being practiced elsewhere, for example, in Britain where the principles of our law practice and the code of conduct for our Judges came from?

    Let’s see some big fish prosecutions, shall we, and let’s see MACC go into FELDA affairs – they don’t have to wait for reports being made before taking action, do they? No such thing as being proactive? Come on, MACC.

  3. FELDA dan FGVH skrg ni buat mcm syarikat tu bapa dia punya

    berbelanja sakan dan tidak mengikut prosedur in fact secara

    terbuka sbb SPRM buat buat tak nampak atau tutup sebelah mata

    itulah yg berlaku skrg

    so will somebody anybody do something

  4. What stage are we at for malaysia?

    When clear cut corruption is being practiced and exposed, nothing ever comes out of it? Why?

    When the king maker and decider is a political party with no values and trust is running the show, something will go bust.

    Every single week, news are leaked online but what happens? Nothing.

    It seems to me that PAU is more important as i dont see this news being highlighted anywhere except online.

    If as certain reports have mentioned that the incumbents are ganging up to still make the numbers, and they succeed, should this umno baru just die or what?

    • No, they don’t think it’s going to die. Najib does not think so. He said that UMNO got more seats than Pak Lah got in 2008.

      He was a bit worried before the close of nominations last Saturday. When he was confirmed uncontested, why should he care? Assured of another 3 years. And by the next party polls in 2016, it’ ll be too near PRU14 in 2018 for any one wanting to change the President, So, he knows that he is assured of being President and PM for another 6 years until 2019. Those of us not happy will just have to grin and bear it.

      I was informed by a source at Bahagian level that weeks before the nomination day the UMNO Executive Secretary went to the various states to tell the MBs/ UMNO Liasion Chiefs on the need to inform all the UMNO Bahagian/ Branches “not to rock the boat” as far as the No 1 & 2 posts are concerned. Does not matter on whose instruction – the Executive Secretary would even have done so on his own initiative as he would surely have wanted to keep his job.

      Najib’s decision to appoint Khairy Jamaluddin as Minister and Shahrizat as Women’s Adviser in PM’s Dept – whatever her role and functions may be – had also paid off. Quite simple politics, actually. And now those contesting Khairy and Shahrizat are of no consequence in terms of influence and chances of winning. So, Najib is happy. We’ll just have to grin and bear more of Najib’s “liberalist” policies, Khazanah’s surprises, rushing to developed nation status at the expense of NEP etc – the Bumiputera empowerment he announced did not involve structural changes, anyway.

      And we have to keep on speaking up.

      • No brother Abu, dont be a spoilsport. We should quit speaking up. It is a waste of time engaging stupid people. Let them be and pillage whatever they want. You need not be a rocket scientist to predict where it will end eventually:

        “John Campbell, a former U.S. ambassador to Nigeria, said he believed insurgents like those who rebelled in Mali last year, the Nigerian Boko Haram Islamist sect and the Nairobi mall raiders were also partly motivated by anger with what he called “pervasive malgovernance” in Africa. “This is undoubtedly anti-Western and anti-Christian but it also taps into a lot of deep popular anger against the political economy in which they find themselves, in which a very small group of people are basically raking off the wealth,” he said.”

        http://www.reuters.com/article/2013/09/23/us-kenya-attack-africa-analysis-idUSBRE98M0Y820130923

        http://www.gulf-times.com/opinion/189/details/366741/kenya-attack-casts-shadow-on-%E2%80%98rising-africa%E2%80%99-image

        It hasnt come to that point yet, but it is fast approaching inflection point:

        http://en.wikipedia.org/wiki/Inflection_point

        after which its a straight trajectory into hell so you and the blogger are wasting your time speaking up for nothing. So dont spoil the fun . Just get a bag of popcorn, put your legs up and enjoy the show. I already have mine at hand, although as added insurance I have got a couple of exit tickets stashed somewhere. Yawn…time for a snooze…….zzzzzzzzzzzz

      • Hahaha, bro, can you get me some popcorn that’ll pop and blow into people’s faces when I eat even some distance away from them – like when they are in San Francisco!

        Then, I too will cease speaking up, hehe.

      • PS: No physical harm intended, only to let fellows know they are disliked. Even when in SF on the way to UN in NY.

    • Take it easy Bro PJP, There an’t an easy way to combat corruption. A clear cut corruption!  how to measure Bro to what stage Malaysia is in? Corruption is a profession equally as old as prostitution. 

      What we can say, is to tell these corrupted minds, “Don’t play play, we are watching you and don’t fool us, jail is there to waiting for you”

      It is fun to easily put fingers on political party. These corrupted minds do not represent any party constitution and norms, or administratively of a good governance. They are “Hantu Rayas”. Their mischievous minds beyond selves control and many of this kind found in all levels of power and authorities. 

      These Hantu Rayas are canning and colored blind. These Malay Malay, Chinese Chinese and Indian Indian things, they couldn’t care less. Their means are just opportunities and simply boiled down to money. These Hantu Rayas are sadly living in part of our societies. If the penalty is death as a deterrence, probably it works. 

      • But I blame the parties – the political parties, the leaders. They condone it, even perpetrated it, just give lip service to eradicate it.

        Like in the US, elections in Malaysian have also reached billions of Ringgit expenditure these days.

        Even DAP resorts to money politics. DAP Selangor Chief Ronnie Liu complained about it publicly at Selangor DAP Convention last time and the Lim Dynasty ensured he lost his post to Dynasty loyalist Teresa Kok.

        Ordinary corruption by DAP has gotten to a long list – heck, the former DAP Youth chap SYA (runs a blog by that name) pointed out that the DAP Perak cousins Nga & Ngeh started the Tailorgate corruption even just 49 days into power, later took 1000 acres land bribery from Nik Aziz for agreeing to PAS Nizar becoming Perak MB Sekejap.

        Long list, bro, long list – even Fuckatan Rakyat corruption as well. We need to whack it time and time again.

  5. On the Pontian United deal, RM1.2b for 16,000 ha comes to app rm 75,000 per ha is not exorbitant.Considering the plantation is in close proximity of development i.e Gelang Patah and Nusajaya.
    Felda taking over a Chinese owned plantation should be lauded as Malay taking over Chinese land.
    Proposed acquisition of NBP will not be easy.Kulim tried earlier to increase their shares in NBP to 60%, but was stopped by the Papua exchange with reason of protecting national interest.How FGV can succeed will be very interesting.

    • TSH Resources as existing shareholders was only willing to pay 30% lesser that what FGV paid. These are real Chinaman business owners. They know how to calculate.

      Not like FGV. Neither Isa nor Mavani are businessmen. And worse still, both are neither planters too. As far as I am concern, they don’t give a toss what it cost the shareholders, esp when they have a pile of cash to play with.

      What’s the point of paying that kinda money, for a plantation co. which the estate is getting old and soon to be unproductive trees? Probably had it been at RM50-55,000/ha, it would still be a catch to acquire Pontian Plantations.

      Eventually, FGV would need to replant all these trees. At RM12-15000/ha, that would operational cost RM90,000/ha. All cash, all up front.

      Factor that with cost of funds, it would easily be in excess of RM100,000/ha.

      They most important question, what’s the consideration that FGV is willing to invest this kinda money, in cash. In short, where’s the beef in acquiring Pontian Plantations at that price?

      But then again this isn’t as important how much that Lim go-in-between chap made from this deal.

      At the end of the day, Isa Samad as an UMNO VP aspirant would just be seen as giving DAP Life Adviser Dr Chen Man Hin an opportunity to cash out, at the expense of profits that is supposed to go to shareholders which incl Felda settlers.

  6. Wait for another shoking announcement.Felda is buying KAF discount for $1.2 billions rgt.
    What relevance KAF discount with Felda settler and plantation.

  7. That is good news. FGV needs to diversify into properties, discounting, entertainment, hotels, technology and every other business possible.

    Under Tan Sri Isa and Dato Dr Emir Mavani, settlers will be justifiably rewarded for their continued support for FGV and the Government. People should learn to embrace the new liberalism culture sweeping the country and not be stuck to old ways.

    Thank you Najib

    • Yeah, you’d like Najib to continue forever, would you, coz he has been singing your tunes and giving what you people asked for. You from Siitiawan, did you say? Same place as Chin Peng innit?

      “embrace the new liberalism culture sweeping the country”, eh? You’ll never know, conditions might change and Muhyiddin or Ahmad Zahid or the likes of him might get into power not too long from now. Surprises do happen, you know.

    • Hahahaha, good joke. That’s the same neoliberalism culture that swept Malaysia in the mid 90s during Anwar’s go-go days. The very same culture that swept Malaysia into a shithole by 1998. As they say those who don’t remember history are bound to repeat it, good luck, you suckers need plenty of it.

      And yeah FGVH did diversify into something a couple of years ago in the US and got burnt plus its share price is trading at a discount, go figure.

    • What utter nonsense is this?

      Which bleeding idiots as shareholders are willing to see their investments go into businesses where neither they nor the management know anything about?

      Seriously, pls stop talking bollocks!

      What competency hv Isa Samad and Emir Mavani, individually and/or aggregated, got in the plantations; upstream and downstream industry, to begin with?

      Properties? In London?

      Hospitality management?

      You simply can’t imagine how incredibly stupid your baseless single liner is.

      If all of these investments are so bloody good, why didn’t Khazanah and/or CIMB gone into it in the first place?

      Without any shred of doubt Najib the Felinist is a lame Prime Minister, for having hallucinated personalities as advisers, aides and an unrealistic arrogant ingrate as a brother.

      Not to mention a Drama Queen as a cousin!

  8. Why is it the chairman that made all kind of statement/press engagement and not the CEO? He is not in anyway a subject matter expert, just a politician – not even a good one at that. In fact he is a convict, who was once found guilty of graft!

    You don’t hear this kind of grandstanding from other chairman or BOD in general if it is a well run company.

    This “diversification”, buying all kind of real estate beginning to sound like a NFC re-dux. It sent a chill down my spine to think of what FELDA will ends up with/looks like by the end of this bugger tenure.

    Najib should not appoint idiots to important post with defending his own position as the main criterion.

  9. […] There are issues of governance in these instances. Addendum to the the recent acquisitions made, at exorbitant prices. […]

  10. You all mean Chinese Singaporean Trojan Horse DAP sucks RM1.2 Billion money out of UMNO. Vide the brilliant Lee Kuan Yew with his 10 failed Policies latest book, Page 87,’……And some nations are like creepers (serpents), they depend on a tree and they creep up a tree.’


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