Hornbill Unleashed

December 30, 2016

Rafizi: Felda injecting capital into EHP without control over land bank

Filed under: Politics — Hornbill Unleashed @ 8:01 AM

PKR vice-president Rafizi Ramli has shot down Felda’s defence of its decision to acquire a 37 per cent stake in Indonesia’s PT Eagle High Plantations, pointing out that the federal agency will not have any control over access to the latter’s 425,000 hectares of landank.

In a statement, Rafizi said that decisions surrounding access to Eagle High’s land and other issues would still be determined by Indonesian billionaire Peter Sondakh, who would remain in control of EHP, despite having a reduced stake of 31.6 percent via his Rajawali Group.

“This is a madness which has never happened, where a non-majority stakeholder is given the power to control the company,” said the Pandan MP, who cited findings from a CIMB Research report on EHP dated June last year.

“Therefore, the issue of Felda gaining access to massive land bank does not arise because the fact remains (based on its terms of negotiations) that it appears to be injecting capital into EHP without any deciding voice on how the business will be managed,” he said.

This, Rafizi said, was aside from his initial concerns over Felda’s state of finances and its ability to fund the US$505.4 million purchase at three times above the market value.

Rafizi, who described Sondakh as being a close associate of prime minister Najib Abdul Razak, also questioned whether Felda had been “forced” to inject funds into EHP without securing any control over its operations.

PAS deputy president Tuan Ibrahim Tuan Man had earlier today pointed out how Sondakh had purchased shares at EHP for 400 rupiah per share. It was estimated that Rajawali Group had spent US$570 milliom to acquire a 68.6 percent stake in EHP.

Felda’s cost to acquire the 37 percent stake, Tuan Ibrahim added, was almost as high as the amount paid by Rajawali Group to acquire the 68.6 percent stake in EHP.

Felda had previously reassured settlers that their well-being would not be affected by the acquisition plan.

Aside from improving Felda’s tree profile, the federal agency also described the move as a last opportunity for Felda, Malaysia, or any other foreign parties to acquire an Indonesian company with massive land bank.

Source : @ Malaysiakini


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