Bumper ‘harvest’ for Felda settlers

Malaysia's 112,635 Felda settlers are set to reap at least five benefits from the upcoming listing of Felda Global Ventures Holdings Bhd (FGVH) which is slated by end-June.


A source said for starters, the country’s oil palm pioneers grouped under Federal Land Development Authority (Felda) will be offered blue forms to own a direct stake in FGVH.

Secondly, Felda, the statutory body which presently owns 100 per cent equity in FGVH and offering for sale 63 per cent of this stake under the listing exercise, will hive off 20 per cent of
the 37 per cent remaining stake it still will own in FGVH post-listing to the Felda settlers.

This 20 per cent stake, which is worth an estimated RM3.7 billion, will be held in trust for the registered settlers in perpetuity.

“Under the Felda Act, the authority with the approval of the minister in charge which in this case is Prime Minister Datuk Seri Najib Razak, can set up a trust fund for the settlers.



“The settlers will earn dividends from this trust fund forever as long as FGVH makes money,” says the source.

The remaining 17 per cent in in FGVH will be held by Felda but the source said the authority will negotiate with Koperasi Permodalan Felda (KPF) to swap this stake with the cooperative’s
51 per cent stake in Felda Holdings Bhd.

FGVH owns 49 per cent of Felda Holdings, while the remaining stake is owned by KPF which has 240,000 members who are settlers
and employees of Felda.

(KPF initially was supposed to swap its 51 per cent stake in Felda Holdings for a 37 per cent stake in FGVH. However, the plan fell through as the cooperative could not seek an approval from its Extraordinary General Meeting in time because it was blocked from doing so by eight members who obtained a court injunction to stop the EGM.)

Thirdly, although KPF is no longer part of the listing plan, the settlers will still earn dividends from KPF which will benefit from its investments in Felda Holdings.

The fourth benefit that settlers will get is in the form of a windfall to be announced by the Prime Minister on May 8 in Jengka, Pahang, which will be partly financed by the proceeds raised from FGVH's listing.

"This 'durian runtuh' is in recognition of the settlers' 40 years of hard work toiling the land as pioneers of the industry with no electricity and proper roads. It will be more than the Bantuan Rakyat 1Malaysia.

The fifth benefit, the source said, is that settlers get to keep the land given to them since 1956.

"The initial public offering (IPO) will only list the 355,846ha of plantation land leased by FGVH from Felda.

"It will not touch even an inch of the more than 500,000ha already owned by the 112,635 settlers and their more than 1.6 million family members," said the source.

FGVH, which is wholly owned by the government agency Felda, is set to be listed by end-June with an expected market capital of RM18 billion.