If my friend, Pirate of Putrajaya, had been a little bit more patient, he will find his views on the FGV vindicated. Probably he underestimated the will of the government to use GLCs under its control to shore up the FGV price.
Nevertheless, his views will be vindicated soon and I and millions of others hope he will come back into blogosphere to share with us, his rapier sharp analyses.
What Najib is doing right now is just putting out fires. He forgot that it all needed but a single spark to light up the prairie fire.
He has given advance bribe of RM15,000 each to felda family. I hear, full payment hasn’t been given out yet. Perhaps felda will use its gain of RM5.99 billion to pay the balance of what has been promised by Najib.
Because of the drop in FGV share price, he has also announced that Felda will pay for the settlers’ purchase of FGV shares. Once again, that will probably come from the RM5.99 billion.
Finally to placate the settlers’ anger, he has announced that Felda will pay for PTPTN loans taken by the Felda children.
That is his economic strategy. We don’t have to go the Chicago, Princeton, Oxford or Cambridge to do that. Not even Nottingham.
What was the real agenda really? Maybe all this corporate bullshit was about saving FGV. It has done extensive futures trading and had incurred huge losses. That was why some brainy people came up with the idea, the only way to save FGV was to have it buy out KPF’s share in Felda Holdings and go for listing.
At closing time today (September 10, 2012), FGV share was RM 4.68, earning the holders of the stock a premium of 13 sen. If Najib hadn’t come up with the brilliant idea of ordering Felda to finance settlers’ purchase, each settler ends up with a RM94.70 loss.
Actually FGV bought out Felda Holdings to save itself. It has incurred heavy losses doing futures trading. We don’t know how much FGV got by selling its shares. There was no cash payment involved as the purchase was financed by the issue of new shares which were sold to the public through the IPO.
Part of the proceeds were used by Felda to pay its EPF loan amounting to RM6 billion. Then EPF is instructed to buy FGV shares, now it owns 7% of FGV bought for RM 1.2 billion. Foreign interests are selling down to cut down losses.
What is even more pernicious and atrocious is the betrayal to Felda people. 360,000 hectares of land have been forfeited which could be used in future to create 80,000 new settlers.
Its dark days looming over Felda and no amount of PR exercise can mitigate the anger that is shoring up. There is a tsunami looming over Felda.