KUALA LUMPUR (Sept 12): Two Opposition members of Parliament (MPs) have questioned the government's decision to permit Kuala Lumpur Kepong Berhad (KLK) to acquire a 33% stake plus one share in government-linked company Boustead Plantations Bhd (BPlant), as they contend that the deal weakens Bumiputera interest.

Member of Parliament for Pendang, Awang Solahuddin bin Hashim, called on the Ministry of Defence to explain why government-linked entities Boustead Holdings Berhad (BHB) and Lembaga Tabung Angkatan Tentera (LTAT) divested part of their stakes to KLK, describing this decision as "dangerous."

"Now, KLK holds a total of 34% equity in BPlant, while BHB and LTAT will only retain around 33% equity. This means that the remaining 33% equity will be available [in public hands]. KLK can also acquire this 33% equity at any time, giving them complete control over BPlant's decision-making, including the appointment of board members," he said during the debate on the 12th Malaysia Plan (12MP) Mid-Term Review.

Awang noted that BPlant has never recorded losses in the past and even achieved a revenue of RM1.2 billion for the financial year ending December 31, 2022 (FY22). Therefore, he questioned why BHB and LTAT would divest their equity stake in the company.

He also pointed out that this decision contradicts the prime minister's commitment to continue the empowerment of Bumiputera.

Similarly, Member of Parliament for Machang Wan Ahmad Fayhsal Wan Ahmad Kamal also urged the government to clarify the rationale behind KLK's stake acquisition in BPlant.

He stated that although KLK's acquisition of a 33% stake in BPlant resulted in a return of RM1.15 billion for LTAT and BHB, the transaction is deemed concerning because 221,000 acres of high-potential land have potentially fallen into the hands of non-Bumiputera individuals.

"What is the rationale behind the government allowing this? Why wasn't it sold to Sime Darby, which is under Permodalan Nasional Berhad (PNB), if the government genuinely aims to achieve the goals of the 12MP to enhance Bumiputera equity?" he questioned.

On August 24, KLK announced a plan to acquire a 33% stake plus one share in BPlant, purchasing the shares from LTAT and its flagship company, BHB, which was recently privatised to enable the fund to deal with its huge debts.

KLK will pay RM1.55 per share or RM1.15 billion in cash to LTAT and BHB and undertake a mandatory general offer for the shares it does not own in BPlant.

Announcing the proposed stake sale, LTAT chief executive officer Datuk Ahmad Nazim Abd Rahman had stated in a statement, "This timely strategic collaboration marks the beginning of the reset strategy for BHB, which will result in significant value enhancement to the group."

KLK has entered into a letter of agreement with BHB and LTAT to agree on the cut-off date for a strategic collaboration agreement (SCA) to be set on September 22 or any other date as may be agreed upon in writing between KLK, BHB and LTAT.

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