Serious blunder or dishonest reporting?

What war chest, Mr Leslie Lopez?  This is something the boys and girls at The Malaysian Insider won't be proud of, quoting the Straits Times of Singapore as alleging that:

 "... the ruling BN goverment hoped to raise as much as RM6 billion from publicly listing the federal land authority (sic) in March next year TO FUND ITS ELECTION WAR CHEST". 

Where the hell did Debra Chong get the idea about an election war chest?

Read her misleading piece below and Leslie Lopez's report that follows. Mr Lopez of ST did refer to the sum of RM6 billion (in the 2nd para of his story) ...

Malaysia's Federal Land Development Authority (Felda) could raise as much as RM6 billion (S$2.5 billion) from the listing. But its financial misadventures overseas are posing serious problems to its corporate reorganisation.

... but he made no mention whatsoever about an election war chest!

I am sure Felda will find the Insider's article offensive. The innocent reader would now wonder, was that an honest mistake or was that a dishonest reporting? (the phrase was used by this seasoned journalist who alerted me to the blunder just before dinner).

Whatever it is, the Insider owes Felda, the Straits Times of Singapore, and its readers an explanation. (Usually, editors don't mind apologizing for such mistakes though I know of one who now goes about as a "businessman" who refused to apologize for one of the greatest lies told in a newspaper column in Malaysia...)

The Malaysian Insider's "dishonest reporting":

Felda faces barriers to going public 

By Debra Chong  

KUALA LUMPUR, Nov 25 — State-owned Felda is experiencing problems in its overseas stakes that appear to threaten its planned listing and could further impact national polls widely expected to be called next year, the Singapore Straits Times reported today.  

The Singapore daily noted that the ruling Barisan Nasional (BN) government hoped to raise as much as RM6 billion from publicly listing the federal land authority in March next year to fund its election war chest.  

But complications from Felda’s business ventures abroad, including a US-based vegetable oil processing company called Twin River Tech, have thrown a spanner in the works. Felda had acquired the plant in 2007 for RM241.4 million and was mulling selling it off to plantation giant Sime Darby, but the plan is also held up due to pricing issues.  

“Trimming the problem assets would make the listing more attractive, but finding buyers isn’t going to be easy,” the paper reported an anonymous senior banker close to the Felda restructuring plan as saying.  

It said Sime Darby’s Thai partner, PTT Chemical International — in another US-based oleochemical company — would unlikely support the proposal. It cited another anonymous banker as saying: 

“The (Felda) management has set end-March as the target for the listing. We will be lucky if we get it down by May.”  

According to ST, these complications were likely to add to the rising protests from some of the 113,000 Felda settlers who collectively own the controlling 51 per cent stake in the company and represent a crucial voting group.  

The crux of the matter, the paper reported, was because of Felda’s complex corporate structure. Felda Global Ventures Holdings, which handles many of the loss-making business ventures abroad, has a direct 49 per cent share in the main company called Felda Holdings. Felda Holdings is the money-spinning enterprise that handles the agricultural and plantation-focused side of the business in the country and is owned by the politically powerful settlers’ co-operative Koperasi Permodalan Felda, the Singapore paper observed.  

It noted too that Umno, the BN’s lynchpin party, had long depended on the co-operative members to deliver the votes in as many as 54 federal seats in the 222-member Dewan Rakyat. But the opposition Pakatan Rakyat had in recent months made inroads into this Malay-centric vote bank and exposed many financial irregularities and mismanagement within the Felda corporation, and fanned a groundswell of distrust against the ruling BN bloc.

ENDS

The Straits Times' honest reporting:

Felda's planned listing faces hurdle 

Leslie Lopez, Senior Regional Correspondent 

25 November 2011 

Malaysian plantation giant having difficulty getting rid of problem assets overseas  

KUALA LUMPUR: One of the country's largest state-controlled plantation groups wants to spruce up its corporate profile with a major overhaul ahead of a public listing early next year.  

Malaysia's Federal Land Development Authority (Felda) could raise as much as RM6 billion (S$2.5 billion) from the listing. But its financial misadventures overseas are posing serious problems to its corporate reorganisation.  

These could attract opposition from the roughly 113,000 people who have settled on Felda plantations. Collectively, they control a major stake in the company and represent an important electoral voting bloc in peninsular Malaysia.  

That in turn could have far-reaching implications for Prime Minister Najib Razak's ruling Barisan Nasional (BN) coalition government, which is planning to call snap polls ahead of its five-year mandate expiring in mid-2013.  

'Trimming the problem assets would make the listing more attractive, but finding buyers isn't going to be easy,' said one senior banker close to the Felda restructuring.  

One major problem is Felda's investment in a loss-making United States-based vegetable oil processing company called Twin River Tech, which was acquired in 2007 for RM241.4 million.  

Felda is considering divesting its interest in the project to the Sime Darby plantation group, which also owns an oleochemical plant in the US. But the plan is facing problems over pricing issues. What is more, Thailand's PTT Chemical International, Sime Darby's joint-venture partner in US company Emery Oleochemicals, is unlikely to support the proposed acquisition, financial executives said.  

The complications arising from the financial troubles faced by Felda's international assets could delay the planned public listing targeted for the first quarter of next year, which the government hopes could raise as much as RM6 billion.  

'The (Felda) management has set end-March as the target for the listing. We will be lucky if we get it down by May,' said the chief executive of a Malaysian financial institution who is closely tracking Felda's corporate reorganisation.  

Several financial executives said that even if the deadline is met, coming up with a financial structure that will be palatable to the group's settler farmers, who collectively control a strategic equity block in the company, could be tough.  

The Felda group has a complex corporate structure. The government's wholly owned Felda Global Ventures Holdings, which owns many of the loss-making overseas operations, has a direct 49 per cent interest in the corporate jewel called Felda Holdings.  

Felda Holdings is the corporate stable for the group's profitable domestic agriculture businesses and other plantation-related business. It is 51 per cent owned by the politically powerful settlers' cooperative Koperasi Permodalan Felda.  

The plantation group's ethnic Malay settlers, who cast deciding votes in 54 parliamentary constituencies in peninsular Malaysia, collectively own the cooperative.  

Datuk Seri Najib's United Malays National Organisation (Umno) party has long relied on this group of voters to preserve its political dominance in the BN coalition government. But political analysts maintain that Parti Islam SeMalaysia, the country's religious opposition party which controls the state governments of northern Kedah and Kelantan, and Parti Keadilan Rakyat, headed by former deputy prime minister Anwar Ibrahim, have made inroads on Umno's stranglehold on this crucial electoral constituency in recent years.  

The analysts noted that a corporate restructuring of Felda that would dilute the value of the settlers' holdings in the plantation group is sure to be exploited by the opposition, which has in recent months uncovered alleged financial irregularities and mismanagement in the award of government contracts.  ENDS

Read also Big Dog's earlier response to Leslie's article, FGVH listing on track, investments abroad geared for winnings where the blogger made some clarifications. Big Dog has written quite extensively on the public listing of Felda in both his blog and the MSM.