'Trust fund afterthought to placate Felda settlers'

If the government is not fleecing Felda settlers, then why did it not give Felda Global Ventures Holdings Bhd (FGVH) shares directly to Koperasi Permodalan Felda (KPF), instead of setting up a new mysterious 'trust fund'?

This is the question raised by DAP national publicity secretary Tony Pua (right) today, who is also the MP for  Petaling Jaya Utara.

He was responding to Felda's chairperson Isa Samad's statement yesterday that a 20 percent stake in FGVH has been set aside under a 'trust fund'.

Isa claimed this debunked the opposition's allegation that Felda settlers were being short-changed in the FGVH listing exercise which did not involve KPF.

Isa also claimed that KPF had refused to participate in the listing of FGVH.  

“We had reserved 37 percent for KPF. But we still have a trust fund so 20 percent of all profits will be given directly to the settlers as dividends,” he said at the launch of FGVH’s initial public offering (IPO) prospectus yesterday.

Seventy percent owned by Felda settlers, with the balance owned by Felda employees, KPF was set up in 1980 to become a savings and investment trust for Felda members.

Its intention is to give a fair opportunity to Felda members to take part in equity ownership of companies under Felda.

'KPF taken for ride'

Isa's statement, said Pua, is a complete lie because KPF has expressed shock in its statement issued on Apr 27 at their being left out of the IPO exercise.

“They had claimed that the decision to leave them in a lurch contradicts the budget statement issued by the Prime Minister Najib Abdul Razak which stated that the interest of the Felda settlers will be protected via the majority ownership of FGVH via KPF.

“KPF has further stated in no uncertain terms that they had supported the government’s intent to list FGVH.
 
“Hence under such circumstances where KPF has been a willing participant, why should the government set up a new mysterious 'trust fund' when it could just park the shares whose beneficiaries are the Felda settlers, under KPF?” asked Pua in a statement today.

The fact that the FGVH prospectus makes absolutely no mention of the existence of such a 'trust fund', claimed Pua, only serves to deepen suspicions over the government’s real intentions.  

“The 'trust fund' idea appears to be an afterthought expressed to placate the settlers who are clearly at the losing end of the Felda restructuring and FGVH listing exercise,” he asserted.

“I had highlighted yesterday that FGVH will be cannibalising the income and earnings of KPF as 355,864 hectares of plantation land previously managed by KPF subsidiaries is being transferred into the hands of FGVH, to boost FGVH profits by RM680 million annually (based on its 2011 performance).  

“Hence the exclusion of KPF from any participation in FGVH after KPF’s future earnings have been significantly cannibalised by the latter proves that the government isn’t sincere about prioritising and protect the interest of the Felda settlers.”

Pua further pointed out that Najib's earlier statement was also clearly attempting to mislead the settlers by claiming that Felda settlers “will definitely get priority in the listing of FGVH when over 70 percent of the retail shares offered for public listing are allocated for the settlers, Felda staff and individuals who have contributed to the organisation”.  

In fact, Pua said, the prime minister’s assurance is disingenuous because only 12.5 percent of the offer shares are reserved for retail investors.

“Therefore in real terms, only 9.2 percent of the shares offered are reserved for the above group of people to purchase.
 
“And in fact, after listing, should the entire allocation of shares be fully subscribed, the said group of settlers, Felda employees and other contributing individuals will hold only meager 3.68 percent of the enlarged share capital!”

Pua urged Najib and Isa to instead immediately announce that 20 percent of the government’s stake in FGVH’s post-listing will be transferred directly to KPF, as the sole body entrusted to protect the savings and investment interests of the Felda settlers and its employees.  

“If the government choose to persist with the hare-brained 'trust fund' idea, then it is clear that the government intends only to take the settlers for a ride,” Pua added.