KUALA LUMPUR: The ongoing saga of the proposed voluntary termination of Country Heights Grower Scheme (CHGS) – the country’s first oil palm farm-sharing investment scheme – has taken a new turn with a Minority Shareholder Watchdog Group (MSWG)-led group making a counter proposal to its founder Tan Sri Lee Kim Yew for the scheme’s termination.

The first issue the group addressed was the postponement of the general meeting to a later date, from Friday, so as to have more time for pressing issues to be ironed out.

“Investors are quite concerned about the issue of this scheme, and they feel quite short-changed with the early termination. Nevertheless, they are willing to negotiate certain terms,” MSWG chief executive officer Rita Benoy Bushon said.

Some 60-plus of about 10,000 investors in the scheme gathered at the MSWG office in Kuala Lumpur yesterday to discuss Kim Yew’s proposal to terminate the scheme.

In a phone interview, Kim Yew said: “The MSWG might have actually undermined those who might want to vote for the proposed voluntary termination to pass.”

He said that Plentiful Gold-Class Bhd – the management company of CHGS – had proposed to hold the general meeting on Friday as meeting at a later date could result in the scheme’s default.

He added that as per the trust deed of the scheme, if the management company did not fulfil the payout on Feb 14, the scheme would automatically go into default and would then be handled by the trustee – CIMB Commerce Trustee Bhd.

Kim Yew said the management company was receptive to any proposal the group of investors made. “No matter what it is, there will be some objection. We want the ‘minority’ group to understand this,” he said.

He urged CHGS investors to attend the meeting and voice their concerns there.

Bushon, meanwhile, said the Companies Commission of Malaysia (CCM) had been alerted on the issue. “If no action is taken, the growers will get a court injunction to postpone the meeting,” she said.

She also said the investor group would agree to the termination if CHGS paid the 12% dividend, due on Feb 14. Additionally, 10% of their capital is to be paid within a month, while the remaining 90% is returned within six months.

As had been reported earlier, Kim Yew said the management company was unable to deliver the payout; hence it was proposing to terminate the scheme. If the proposal is approved, then the company would return 10% of the capital within a month, and the remaining 90% within two years.

However, he said the remainder could be paid out in six months or earlier, should everything proceed smoothly.

The management company had already paid out dividends totalling 48% yield in the past five years.

Kim Yew said investors would receive about RM294mil compared with the RM215.5mil amount raised when the scheme was first launched in 2007.

The plantation land will be up for sale via an open tender at a reserve price of RM170mil if the proposed termination is approved. Any difference between the sale price and the total buyback amount will be borne by the parent company Bee Garden Holdings Sdn Bhd.

Earlier yesterday, Plentiful Gold-Class sent a letter to MSWG addressing the queries raised.

Plentiful Gold-Class director and chief executive officer Lee Kim Heong said it was a public company with a paid-up capital of only RM5mil.

“The management company proposed to the grower to consider the proposed voluntary termination based on the issues stated in the circular and those highlighted in our chairman’s statement, given the current plantation output that is unable to generate the expected yield income to meet the yield payment,” he said.

Bushon said if the management company did not accept the investors’ counter proposal, they would opt to go against the scheme and let the process take its course.

“CCM must ensure that these schemes are properly managed and properly governed. Even termination should be properly done so that the market has confidence in such other schemes. It should be well conceived and not structured badly. As an oversight body, you must make sure it is a well-conceived scheme,” Bushon said.

It is understood that Plentiful Gold-Class communicated with Bushon later in the day that MSWG should address the issues through an official letter to the company.

Plentiful Gold-Class would need more than 75% of investors to agree for the proposal to go through.

Source by: The Star

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