JERANTUT Malaysia May 8 Malaysia's oil palm
farmers will be getting a $553 million election-year windfall
from an initial share sale of a giant state-controlled palm oil
plantation company, Prime Minister Najib Razak announced on
Najib has been trying to regain political momentum with a
slew of government handouts after his ruling National Front
suffered an unprecedented setback in 2008 elections.
Felda Global Ventures Holdings (FGVH) is looking to raise $3
billion, when it lists on the Malaysian stock exchange next
month, in what would be the world's second-largest initial
public offering (IPO) this year after the Facebook listing.
About a fifth of the proceeds from selling 2.19 billion
shares will be handed out to 112,635 farmers who work on land
allocated by the Federal Land Development Authority (FELDA),
While FELDA's listing of its commercial arm brings financial
firepower to Malaysia's $27 billion palm oil sector, giving some
of the proceeds to farmers - a key vote bank - is another sign
that Najib is ready to call snap polls within weeks.
The opposition has criticised the listing saying the
farmers' cooperative will lose control over how the plantation
company is run.
"We are not trying to kill the farmers with the listing as
the opposition says," Najib told a gathering of about 10,000
farmers at an oil palm estate in his home state of Pahang in
central Malaysia. "We are making history with this windfall.
"The listing marks a new era and is a step forward from my
father's dream," he said.
Najib's father, former prime minister Abdul Razak, started
FELDA in the 1950s, handing out land to impoverished ethnic
Malays. The farms expanded to 880,000 hectares and helped
Malaysia become the second-largest palm oil producer in the
The listing of FGVH clubs together refineries, plantation
management companies and logistics firms as Malaysia looks to
build an agribusiness to rival Singapore's Wilmar International
Younger FELDA settlers had initially opposed the listing,
fearing a loss of control over an asset their rural cooperative
has invested in for decades.
A legal challenge they filed with backing from the
opposition led by former deputy prime minister Anwar Ibrahim was
dismissed and the listing was recently approved by the
cooperative. The opposition has now said they will look at other
legal avenues to stop the listing.
Both the government and the opposition have been trying to
court the farmers, who number about one million out of
Malaysia's 28 million population when their extended families
The FELDA settlers form the bulk of the vote in 52 of
Malaysia's 222 parliamentary seats, including Najib's base in
Pahang, and they are ethnic Malays - a key support group for the
ruling National Front coalition.
Rural Malays threw more of their votes to the opposition in
the 2008 elections, complaining that Malaysia's affirmative
action programme had disproportionately favoured urban and
Government-linked newspapers have reported that in addition
to the cash windfall farmers will also hold shares in a trust
that owns 20 percent of FGVH worth 3.7 billion ringgit ($1.2
billion) and get first preference in buying more shares in the
Reuters reported last week that the third-largest oil palm
plantation operator by plantation area has started offering its
IPO shares to indigenous "Bumiputras" at an indicative price of
4.65 ringgit per share.
Bumiputra, meaning "sons of the soil" in the Malay language,
refers to the majority ethnic Malays and other indigenous people
in the country who benefit from a decades-old affirmative action
policy that favours them in housing, education and business.
($1 = 3.051 ringgit)
(Additional reporting and writing by Niluksi Koswanage; Editing
by Bill Tarrant and Robert Birsel)