Archive for the 'Financial' Category

19
Jan
18

Turkey Of The Year: Why did FELDA buy 37% of Eagle High?

Turkey Of The Year: Why did FELDA buy 37% of Eagle High?

IT came as a surprise when the Federal Land Development Authority (FELDA) was reported to be in talks to acquire a 37% stake in PT Eagle High Plantations Tbk from Tan Sri Peter Sondakh’s Rajawali group. The deal was concluded for US$505.4 million or RM2.26 billion in April.

While FELDA attempted to justify the purchase — among other things, saying it got a 30% discount from Rajawali — most market watchers, analysts and industry players questioned the merits of the deal.

After all, FELDA’s 33% unit Felda Global Ventures Holdings Bhd (FGV) had scrapped plans to buy the same block of shares upon the advice of two separate advisers, Bank of America and JP Morgan, for a variety of reasons. So why buy an asset its own unit had walked away from?

Apart from that, Peter Sondakh is known to be well connected in Malaysia, giving rise to talk that the deal may have been politically motivated.

To recap, in June 2015, FGV signed a heads of agreement with Rajawali to acquire a 37% block in Eagle High for US$680 million in a mix of cash and shares.

In 2015, the average crude palm oil (CPO) was RM2,258 per tonne, compared to RM2,670 so far this year — which indicates the offer to FGV would have been overpriced if a 30% discount was given after a rise in the CPO price.

The fact that it was FELDA Investment Corp (FIC) Properties Sdn Bhd — originally mandated to acquire non-plantation assets — that acquired the shares also raised eyebrows. Most would think FGV would be the natural choice to invest in plantation and agriculture-related assets.

So, did FIC Properties step in because FGV was advised against buying Eagle High?

The US$505.4 million for the 37% stake works out to IDR580 a share — a whopping 95% premium to Eagle High’s closing price at the time. With Eagle High now trading below IDR180, it means FELDA is sitting on a paper loss in excess of US$326 million.

Now, eight months after the acquisition, Eagle High’s market capitalisation is just below US$420 million, which means FELDA’s 37% is valued at just US$155.4 million — less than one-third what it paid.

Attempts by FELDA chairman Tan Sri Shahrir Samad to suggest that FELDA was an intermediary for the Malaysian government did not come across as a strong justification for the acqusition.

“We are representing the government of Malaysia on two levels — the management and board of directors of Eagle High,” he said in August.

FELDA officials also explained that the acquisition was made with government funding, which raised the question as to whether the agency would have been able to obtain the funding on its own.

But what is not clear is why this acquisition is so important that FELDA had to pay more than RM2 billion for it via a loan from the government?

…more
Turkey Of The Year: Why did FELDA buy 37% of Eagle High?
January 01, 2018 – theedgemarkets.com

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16
Jan
18

Anger, puzzlement as owners face losing new homes to HSR

Anger, puzzlement as owners face losing new homes to HSR

SPECIAL REPORT | See Chang Long, a 33-year-old chef, had over the years saved up as he surveyed the property market for a new home in Malacca. Having lived with his own parents, the father of two had wanted to purchase a new home for his own family.

In October, he decided to put down a 10 percent deposit totalling RM47,880 on a terrace house in a new residential area in Taman Satu Krubong.

But See’s joy of owning a new home quickly evaporated when he learnt within a month that the Kuala Lumpur-Singapore High-Speed Rail (HSR) had been planned to pass through his Jalan Samarinda 5 property.

“The developer never mentioned that land here would be acquired for the HSR. Why did I have to find out about this from the news?

“I used my life savings to buy this house,” an upset See told Malaysiakini.

See added that it was too late to withdraw from the purchase as the bank had already disbursed 25 percent of the loan to the developer.

Taman Satu Krubong, located around 9km from Ayer Keroh town and 16 kilometres from the Malacca City Centre, is slated for “overall completion” next year.

The freehold development comprises a mix of mid-range to luxury gated terrace houses and bungalows. Prices listed online ranged from RM400,000 to RM900,000.

Likewise, See’s neighbour Kathy Ong, a mother of two in her 40s, had purchased a house along the adjacent street at Jalan Samarinda 6.

Now that Ong has learned about the HSR alignment, she wants it to be moved away from the residential area and refuses any compensation.

“No matter how reasonable the compensation is, I will not accept it. We do not want the HSR to be built in our housing area.

“We have finally found such a good living environment. Less than a year after buying it, it is now going to be taken away from us. Where do you want us to go?,” she told Malaysiakini.

The HSR public inspections process started in November and will continue until the end of January 2018.

Malaysiakini, which had visited the public inspections, found that the project’s vehicle MyHSR Corporation had taken pains to minimise the need for property acquisition along the estimated 328-km length alignment on the Malaysian side.

Township does not exist on HSR map

However, the case of Taman Satu Krubong was unusual as in that it cuts through a brand new residential area.

Interestingly, based on the alignment map of the HSR public inspections, this residential area does not exist.

It was only after the alignment was crossed checked against Google Maps satellite images that it can be observed that the HSR will cut through a long row of properties, suggesting that the satellite images used in the HSR public inspection could be an older version.

Previous reports indicate that as many as 73 houses stand to be directly affected.

…more
Anger, puzzlement as owners face losing new homes to HSR
30 Dec 2017 – malaysiakini

13
Jan
18

Felda settlers want changes in leadership

Felda settlers want changes in leadership

Jempol Felda settlers complain of higher debts and lack of proper management.

PUTRAJAYA: The scandals affecting Felda and increasing debts are troubling settlers.

Abdul Rahman Ramli, 58, speaking on behalf of settlers from the Felda Raja Alias settlement in Jempol, claimed the management had “absolutely failed” in its administration of Felda.

Rahman was present at the handing-over of a memorandum to the Malaysian Anti-Corruption Commission (MACC) to urge them to investigate how Felda’s Jalan Semarak land changed hands today.

“As a settler, it breaks my heart to see that the management has absolutely failed us.

“Not only that, there are various scandals that Felda have been implicated in.

“The debts of settlers are also going up. Some owe Felda thousands of ringgit,” he told FMT today.

Rahman suggested that perhaps it was time Felda changed its leaders, who were drawn mainly from Umno.

“I hope all Malaysians understand our situation and why we are upset by the alleged corruption in Felda.”

Rahman was disappointed the management cannot even show settlers their accounts.

“Even with all the technology available, they can’t do something so simple.

“This is disheartening and it keeps us in very low spirits.”

It was time the settlers spoke out against such bad management of Felda, Rahman, who is also Jempol Amanah chairman, added.

“We do not have to wait for Felda to be implicated in such mega scandals before we voice out our concerns. There’re just too many scandals, just one after the other.”

New leaders can make the change for the settlers, he believed.

“I honestly believe that this is not the end of the road for us, all we need are better leaders, new ones, and we can get back on the right track.”

He said if Felda continues to be involved in controversies, settlers will lose confidence in the present administration running things.

…more
Felda settlers want changes in leadership
December 27, 2017 – FMT

11
Jan
18

Malaysia’s 1MDB settles debt owed to Abu Dhabi with China backing

Malaysia’s 1MDB settles debt owed to Abu Dhabi with China backing

KUALA LUMPUR – State-owned 1Malaysia Development Bhd (1MDB) has made the final settlement of US$602.7 million ($S810 million) in debt obligations to Abu Dhabi’s International Petroleum Investment Company (IPIC), by divesting its stake in two companies to buyers linked to Chinese state-owned enterprises.

The payment, the second tranche to a US$1.2 billion dollar loan IPIC extended in July 2015 to the troubled 1MDB, was made on Friday (Dec 22), ahead of the end-December deadline that both parties agreed to in early April this year.

IPIC confirmed in a statement on Wednesday that “it has now received all the funds required to be paid to it under the Settlement with the Minister of Finance (Incorporated) Malaysia and 1MDB and the Consent Award made on 9 May 2017”.

“The process to pay is being initiated early because the funds are in place and 1MDB wants to avoid any administrative trip-ups that could result from the banking holidays at the end of the year,” one Malaysian government official familiar with the settlement said.

The first tranche was settled in August.

The second instalment will be paid with funds raised from the sale of investments in financial instruments held by the Malaysian investment company and stakes held in two 1MDB-related entities that own tracts of land in the northern Penang state and another 318-acre real estate parcel around Port Klang, the sources said.

Malaysian government officials declined to identify the buyers in the real estate transactions but one financial executive close to the situation said that the equity interests in the 1MDB real estate entities were acquired by “concerns ultimately controlled by Chinese state-owned enterprises”. The executive declined to elaborate.

1MDB did not respond to requests for comment.

In a statement issued on Wednesday, 1MDB said that all funds were paid from proceeds of its on-going rationalisation programme.

Opposition MP Tony Pua had previously questioned how 1MDB was funding these repayments, and alleged that the Ministry of Finance’s refusal to answer indicated that 1MDB had help from the government.

For the first tranche, 1MDB had said in April that it would use investment units owned by 1MDB subsidiary Brazen Sky Limited to fund the payment.

In June however, the United States Department of Justice (DOJ) said these so-called fund units are “relatively worthless”.

The DOJ has filed several lawsuits seeking to seize dozens of properties and luxury assets that it claimed were purchased with funds misappropriated from 1MDB amounting to over US$3.5 billion. The ongoing probe is one of several worldwide relating to 1MDB. Investigations have also been carried out in Singapore, Switzerland and Hong Kong.

The dispute between 1MDB and IPIC revolves around the IPIC loan and another US$3.54 billion in cash advances 1MDB claimed it made to several Abu Dhabi-controlled entities as part of obligations under a May 2012 bond arrangement.

IPIC claimed that it never received the monies from 1MDB, triggering the dispute.

…more
Malaysia’s 1MDB settles debt owed to Abu Dhabi with China backing
27 Dec 2017 – Straits Times

10
Jan
18

Company in Felda land transfer scandal is interior design company

Shadow cast over ID company in Felda land transfer

KUALA LUMPUR, Dec 27— Questions are being raised about the development experience of local company Synergy Promenade Sdn Bhd, reported to have taken over ownership of the Jalan Semarak land here from the Federal Land Development Authority (Felda).

Malay daily Berita Harian cited an unnamed source claiming that Synergy Promenade is an interior design company with experience in handling some interior projects in Menara Felda and Istana Negara, but none in managing development projects.

“There is no reason for the land to be transferred to Synergy Promenade. Granted the full power of attorney (PA), the company already has enough power to do the development works on behalf of Felda.

“Synergy Promenade holds the PA only as an agent while Felda is the principal so that it could get the development order (DO). So, why would the land need to be transferred to the company?” the source was quoted saying.

According to the source, Synergy Promenade should have only imposed a third-party charge on the land as it had already acquired the DO as well as a lease agreement with Felda Investment Corp (FIC) for a large section of the tower that was to be built.

The source said the third party charge can be collected from the project itself and not from the land, as the company is responsible to fund the project.

The source claimed that in order for banks to approve loans to the company or the project, Synergy Promenade should have a credit worthiness and value to the bank.

Berita Harian also reported that Synergy Promenade was registered on June 15, 2006, and recorded its activities as property developer and construction contractor, general contractor, and general business.

The newspaper added that its checks showed no project developments had been carried out by Synergy Promenade.

…more
Shadow cast over ID company in Felda land transfer
December 27, 2017 – MMO

06
Jan
18

Forensic audit unnecessary to nab culprits in Felda land scam

Forensic audit unnecessary to nab culprits in Felda land scam

THE government does not need to hold a forensic audit to finger the persons responsible for the ownership transfer of Felda’s four parcels of prime land in Kuala Lumpur, as the timeline for the chain of events will provide enough clues to the identities of the guilty parties, Johor PKR chairman Hassan Karim said.

Putrajaya needs only to look at the chronology of events and management chart to identify the individuals responsible, Hassan said at the launch of “Jelajah Selamatkan Felda” (Save Felda Roadshow) in Kota Tinggi in the southernmost state last night.

“We’ve actually told (Prime Minister) Najib (Razak) there is no need to appoint a forensic auditor for an inquiry.

“It’s easy (to pinpoint the culprit). Shahrir Samad is now the Felda chairman. Before that, who was it? Isa Samad. All this is in front of the prime minister. Remember, Felda is under the prime minister,” Hassan said at the event organised by Anak, a group representing second-generation Felda settlers.

Amanah leaders Mohamad Sabu, Aminolhuda Hassan and Hasanuddin Mohd Yunus, Bersatu vice-president Abdul Rashid Asari and Anak president Mazlan Aliman were present..

Hassan was referring to Najib’s promise to get to the bottom of Felda’s latest scandal which came to light last month. About 6ha of prime land on Jalan Semarak was sold for RM270 million to a company which was also given the power of attorney to develop the land, without Felda receiving a sen.

Najib on his blog two days ago said the government had appointed an external auditor to conduct a forensic audit on the Kuala Lumpur Vertical City (KLVC) project that was to be built on the Jalan Semarak land.

“This audit firm will conduct a forensic audit on all activities, decisions and actions related to this project.

“It will also reevaluate the relevant regulatory process, including weaknesses in internal administration, as well as Felda’s oversight of Felda Investment Corporation Sdn Bhd (FIC).

“The audit firm’s investigation will also involve the Kuala Lumpur Federal Territory Land and Mines Office and City Hall,” Najib wrote on najibrazak.com.

Hassan yesterday night said the timeline showed that the land transfer or sale had occurred while Umno warlord Isa Samad was the agency chairman.

Isa was Felda chairman from 2011 to January last year, after which Shahrir took over.

Isa was also chairman of Felda Global Ventures Bhd (FGV) from 2011 to June last year, and chairman of Felda Investment Corporation Sdn Bhd (FIC) from July 2013 to last year.

FIC is also under investigation for acquiring overpriced hotels in London and Kuching, which occured during Isa’s tenure.

Hassan said Felda’s problems were like a movie where characters on the same side played “good cop, bad cop”.

“Najib, Shahrir and Isa represent two faces of the Umno and Barisan Nasional government,” he said.

Anak president Mazlan, meanwhile, said Isa was merely a “yes-man” in the scandals as he ultimately reported to Najib and the Prime Minister’s Department which oversaw Felda.

…more
Forensic audit unnecessary to nab culprits in Felda land scam
6 Jan 2018 – TMI

02
Jan
18

The sad tale of Felda and FGV

The sad tale of Felda and FGV

Instead of becoming rich and comfortable, settlers are now in a constant tussle with Felda over their rights and benefits.

COMMENT

By TK Chua

Federal Land Development Authority (Felda) was one of the rare successes of socio-economic engineering in our country.

It has brought a decent life to many settlers from its inception in the 1950s.

It was established as a statutory body and for years Felda was managed by technocrats. The objective was modest — to bring about poverty alleviation, especially among the rural poor.

Over time, Felda became a very rich and well-endowed organisation, more due to its large holding of land throughout the country when land was acquired at a pittance.

In tandem, the settlers and the government should have become very rich too, benefiting from income and capital appreciation from their investment.

But what happened in recent years was most unfortunate. For reasons which are quite beyond my comprehension, settlers are now saddled with endless borrowings and debts.

Instead of becoming rich and comfortable, the settlers are now in a constant tussle with Felda over their rights and benefits.

Instead of becoming independent, based on what they own, they are now in constant need of “special bonus/payments” from the government.

The problem did not stop there. With corporate bigwigs, consisting of former politicians, indulging in “investing” and “venturing”, the problems in Felda have became bigger.

Almost everything they touched has become mud so far.

I have thought Felda settlers should have been given their free shares when FGV was first listed.

Instead, it was loans in exchange for shares in FGV. Did Felda settlers own anything at all in Felda before FGV was listed?

But not only that, the price of FGV has plummeted from RM5 a share at the time of listing to less than RM2 a share at present.

Did other plantation companies listed in the exchange suffer the same fate as FGV during the same period?

We should ask why, instead of making the settlers richer, we have made them more in debt and poorer.

Then what about their so many other devious and dubious investments, from luxurious hotels in London to a sturgeon fish project in Malaysia. I hope the investigations into them are still going on.

And before we can get on top of all this, we have been handed another bombshell — their prime land on Jalan Semarak in Kuala Lumpur is now embroiled in a controversy and uncertainties.

You know what; I am not optimistic at all that the latest problem in Felda and FGV will be resolved soon.

Label me a pessimist if you wish. In fact, I wish I was wrong.

…more
The sad tale of Felda and FGV
December 25, 2017 – FMT




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We cannot afford ridiculously expensive RM55 Billion ECRL!
All that is necessary
for the triumph of evil
is for good men
to do nothing.

- Edmund Burke
When the people
fears their government,
there is TYRANNY;
when the government
fears the people,
there is LIBERTY.

- Thomas Jefferson
Do you hear the people sing?

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