Monday 4 June 2012

Putrajaya pressed to explain ‘cashing out’ of FELDA shares

June 04, 2012
KUALA LUMPUR, June 4 — The federal government’s stake in FELDA Global Ventures Holdings (FGVH) will be dramatically cut to 40 per cent after its initial public offer, and a federal lawmaker is seeking answers as to why Putrajaya is cashing out.

The DAP’s Tony Pua claimed that such a move was an effective “cashing out” of the government’s ownership of FGVH, just a week after FGVH’s listing prospectus was announced by Prime Minister Datuk Seri Najib Razak.

“Out of the RM9.96 billion to be raised, only 40 per cent of the money will accrue to FGVH for the company’s operations and expansion purposes. The prospectus had listed that out of the RM4.46 billion expected to be raised for FGVH, 87.7 per cent of the funds will be utilised for investment purposes such as acquisition of plantation assets, oil and fats manufacturing facilities and businesses as well as other upgrading capital expenditure.

“However, the balance of the 60 per cent of the IPO proceeds will go towards the government, via the FELDA statutory body. The amount raised by the government will be even larger than the amount raised by FGVH at RM5.5 billion,” the DAP national publicity secretary said in a statement today.

Pua (picture) said there was no mention as to why Putrajaya needed to raise as much as RM5.5 billion by selling down its FGVH stake and that the only known use of the money so far is to distribute a “windfall” payment of RM15,000 to each FELDA
household, expecting to cost RM1.69 billion.

“In fact, the government is selling out so much that its ownership of FGVH is reduced from 100 per cent to only 40 per cent,” he added.

In contrast, he said that for social networking site Facebook’s initial public offering (IPO), its founders and investors only sold a 25 per cent stake and retained 75 per cent ownership.

“The above action by the government therefore begs the question, if FGVH is truly going to be ‘transformed’ into a massively profitable global company, why is the government cashing out as if it cannot wait to get rid of its stake?” Pua asked.

The government should actually hold its shares in FGVH for “as long as possible” to reap its returns in the next few years, the Petaling Jaya Utara MP said.

He added that the government was selling its stake at a time when global investors are viewing the markets negatively, and that this will mean that it will not get the best price for its shares.

“Given the huge sum of money involved as well as the interest of 112,635 settlers at stake, we call upon the government to be completely transparent and accountable in the FGVH IPO exercise that is inundated with question marks,” Pua said.

Putrajaya has forged ahead with FELDA’s controversial public listing despite criticisms from some settlers and the opposition who claim that it will shortchange some 112,000 FELDA settlers nationwide.

Prime Minister Najib has assured the settlers that the listing would yield profits, and has announced a RM1.69 billion windfall for all settlers and staff throughout the country before FGVH’s listing last week.

No comments:

Post a Comment