Instead of creating a new well, Felda Global Ventures Berhad (FGV) is “cannibalising” the profits of Felda Palm Industries Sdn Bhd (FPI), accused DAP’s Tony Pua.

NONE FPI which is 64.7 percent controlled by Koperasi Permodalan Felda (KPF), signed a contract on March 1 where all crude palm oil (CPO) processed will be sold to FGV, except a “small quantity” for FPI’s own subsidiaries, he said.

Pua told reporters at the Parliament lobby that FGV is attempting to form a “toll gate” as the arrangements enable FGV “to earn a margin from the sale of the CPO”, but it does not add value to the deal.

“Based on FPI’s latest available audited accounts, it made RM9.5 billion and RM204 million in revenue and profit, respectively, in 2010. FPI sold 3 million tonnes of CPO for RM8.1 billion during the year.”

NONE Citing FGV’s prospectus, the Petaling Jaya Utara MP said “assuming just a mere 5 percent margin in sales price earned by FGV, is is in essence a loss of profit amounting to RM405 million to FPI”.

“The biggest loser will hence be KPF which owns 64.7 percent of FPI but does not even own a single share in the soon-to-be listed FGVH.

“KPF, which is 70 percent owned by Felda settlers, with the remaining owned by Felda employees, is the entity set up in 1980 to become a savings and investment trust for Felda members.

“Its intent was to give fair opportunity to all Felda members to take part in equity ownership of companies set up by Felda,” said Pua.

He said the government has “sacrificed” the interest of the settlers “by robbing” them of their income but attempting to “inflate” FGV’s profits and attractiveness.

Urging the government not to “shortchange” KPF and the settlers with such “one-sided deals”, Pua said that FGVH should reveal the terms of its contract.

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