There was a time not too long ago when 1MDB and Tabung Haji thought that the best policy for their stakeholders as well as shareholders is the “need-to-know-basis” stand. It reads, “We know the basis, you don’t need to know.”
Now welcome to the modern world where facts and fallacies mix, separated by a thin grey line.
Due to the silence maintained, not only both institutions suffered in the public eyes but the government suffered as well – and is still suffering.
In the end, both wised up but too late to save the government from irreparable public-perception damage.
FGV is now treating its stakeholders and shareholders in the same manner 1MDB and TH did.
Trust me it will not do any good for FGV and the government. If the board of directors are smart or have any hint of it, it should have learned from the 1MDB and TH public-relations fiasco and start engaging its stakeholders and shareholders.
This is no longer a world where corporate “need-to-know” basis really exists save for the ones barred by a legal Act or non-disclosure agreements.
To recap, five days ago, FGV made an announcement to buy a 37 percent stake in Indonesian plantation company PT Eagle High Plantations for US$680mil in cash and shares.
That did not turned out well.
Two days ago, Bernama reported FGV shares was among the top losers in the morning session despite the announcement.
Quoting Kenanga Research, FGV management did not provide a clear indication on whether the 37 per cent stake in EHP will be non-controlling or a controlling stake.
“Should the potential acquisition be considered a controlling stake, this could trigger a Mandatory Tender Offer (MTO) for the EHP, for which raising additional funds could prove challenging,” said Kenanga.
The research house said in the near-term, it is neutral-to-negative on the potential deal, should it materialise, and expects to lower estimated financial year 2015 earnings after including loss of interest income.
Meanwhile, FGV Tuesday (5 days after the announcement) reportedly said it would decide by August on whether to proceed with the acquisition of EHP or otherwise. FGV Chief Executive Officer Datuk Mohd Emir Mavani Abdullah said the deal’s fate would rest on the satisfactory completion of the due diligence being undertaken and shareholders’ approval at an extraordinary general meeting slated for August.
And on Wednesday, EPF that holds five per cent stake in FGV questioned the rationale behind the US$680 million or RM2.55 billion, acquisition of EHP, particularly the generous premium reportedly accorded to the deal, at FGV’s annual general meeting (AGM) Tuesday.
“We expressed our view on the announcement that have been made in relation to their (FGV) proposed acquisition, but we note basically the deal is subject to the due diligence being undertaken, and subject to the shareholders’ vote in the future.
“There was no vote taken on this issue yesterday,” EPF chief executive officer, Datuk Shahril Ridza Ridzuan told reporters after attending the ‘In the Spotlight’ event at the Bursa Malaysia, Wednesday.
EPF currently holds just five per cent stake in FGV, as compared to nearly 10 per cent holdings when the group was listed in 2012, said Shahril Ridza. Other major shareholders of FGV are Lembaga Tabung Haji, Retirement Fund Incorporated (KWAP) and the Pahang government, which hold 7.8 per cent, 5.6 per cent and five per cent stake, respectively.
Start wising up, FGV!