This article first appeared in The Edge Malaysia Weekly on November 6, 2023 - November 12, 2023

FGV Holdings Bhd should go into the record books of Bursa Malaysia as one of the companies that have been without the requisite public shareholding spread for the longest period.

Since February 2021, the plantation company’s public shareholding has been less than 25%, hence, breaching the listing rules. It fell into breach after Felda Holdings launched a mandatory general offer for FGV in 2020 and ended up with more than 75% of the company.

Since then, the management and the board have been looking at various options to fulfil the shareholding spread without Felda relinquishing any control of FGV’s critical assets.

Finally, in June this year, FGV proposed a scheme whereby it would issue preference shares to all shareholders. The preference shares would be backed by dividends from two profitable subsidiaries of FGV.

The two subsidiaries were part of the assets that Felda injected into FGV during its listing in 2012. The two subsidiaries, namely FGV Plantations (Malaysia) Sdn Bhd (FGVP) and FGV Palm Industries Sdn Bhd (FGVPI), are the main dividend contributors to FGV.

Following the issuance of the preference shares, Felda would then have the option to reduce its holding in FGV but not dilute its control of FGVP and FGVPI.

The whole exercise was to have been wrapped up by the end of the year or early next year. But that is not going to happen.

Last week, FGV announced it has not obtained the consent of the minister in charge of Felda and the Ministry of Finance (MoF) as well as the Cabinet for the corporate exercise. Hence, it has been unable to issue the circular to shareholders in relation to the proposed preference shares.

The corporate exercise is in the normal course of business to fulfil listing requirements. Does it need the consent of the MoF, minister in charge of Felda and the Cabinet?

Or is the Felda board being cautious in ensuring it gets the consent of all in Putrajaya before progressing further with the exercise? This is especially after witnessing how the Armed Forces Fund Board, or Lembaga Tabung Angkatan Tentera, had to abort an exercise to privatise Boustead Plantations Bhd at the last minute.

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