The move comes amid heightened interest to take FGV private as part of plans to restructure Felda’s billion-ringgit debt
by SHAHEERA AZNAM SHAH & SHAZNI ONG / pic by MUHD AMIN NAHARUL
PERSPECTIVE Lane (M) Sdn Bhd, a holding company previously involved in the takeover of the Tradewinds Group and Padiberas Nasional Bhd (Bernas), has proposed to inject its plantation assets into FGV Holdings Bhd and become its largest shareholder.
Perspective Lane expressed their interest in a letter dated Oct 12, 2020, according to FGV’s filing to Bursa Malaysia yesterday.
“The board of FGV has decided to deliberate upon the matter and has resolved to explore and evaluate the proposition,” the company’s filing said.
Perspective Lane privatised Tradewinds (M) Bhd (TWM) in 2013, which led to a mandatory takeover of its subsidiaries, Tradewinds Plantation Bhd (TWP) and Bernas. TWM then held a 69.73% share in TWP and 72.57% in Bernas.
The move comes amid heightened interest to take FGV private as part of plans to restructure the Federal Land Development Authority’s (Felda) billion-ringgit debt.
FGV manages some 360,000ha of land leased from Felda in a 99-year agreement signed as part of the company’s listing exercise.
In turn, Felda receives a fixed annual payment of RM250 million from FGV, plus a 15% share of profits. Felda is FGV’s largest shareholder now with a 33.66% stake.
TWP has about 133,000ha of oil palm land across Malaysia, according to its website.
The company has 11 palm oil mills with an annual milling capacity of 2.06 million metric tonnes of fresh fruit bunches.
In a separate filing yesterday, FGV said its board of directors had communicated with the US Customs and Border Protection (CBP) to seek clarification on the findings of its investigation and steps expected to be taken by FGV for the revocation of the withhold release order (WRO).
It said the information around the CBP’s investigation findings was imperative to enable FGV to address and resolve any remaining gaps in its practices.
“A conference call between FGV and the CBP was held on Oct 8, 2020. However, the CBP could not reveal any information about its findings except that its research had identified the 11 International Labour Organisation indicators of forced labour in FGV’s practices.
“The CBP did not disclose any further information about its findings, including the nature or locations of any incidence linked to such indicators,” it said.
The palm oil producer said the CBP had informed FGV that it would consider a petition for the revocation of the WRO, together with information or reports arising from audits from credible, unbiased, third-party auditing firms.
“FGV is already in communication with several independent organisations to explore options for an imminent audit of FGV’s operations. FGV expects to finalise the appointment of an audit firm in the next couple of weeks and to proceed with the audit shortly after,” it said.
On Sept 30, the CBP detained all palm oil and palm oil products made by FGV and its subsidiaries or joint ventures based on information that reasonably indicated alleged use of forced labour.
Critics of the CBP have deemed its decision to be unfair as those affected have no platform to state their case. The Malaysian Palm Oil Association has demanded proof of human rights abuse and forced labour allegations that led to the palm oil import ban on FGV.
Editor’s note: The article has been amended from the print copy to reflect the accuracy in Perspective Lane Sdn Bhd’s name. The error is much regretted.