This article first appeared in The Edge Malaysia Weekly on March 17, 2025 - March 23, 2025

The Federal Land Development Authority (FELDA), which holds 81% of FGV Holdings Bhd (KL:FGV), has no excuse for not being able to meet the public shareholding spread requirement for the plantation company.

Since February 2021, FGV has failed to fulfil the shareholding spread requirement under the listing rules whereby companies are required to have at least 25% of their shares in the hands of the public. FELDA had increased its stake in FGV from 50% to 81% in 2021 following a mandatory general offer (MGO) of the company at RM1.30 per share.

FELDA could not get the required 90% acceptance level to suspend the stock, a move that could have paved the way for it to eventually take FGV private. Among those holding on to the shares are the state governments of Pahang and Sabah, which invested in FGV when it went public in 2012 at RM4.55 per share.

In fact, most shareholders only accepted the MGO because of the poor returns on their investments and corporate governance issues with FGV as well as FELDA.

For instance, FELDA received RM5.7 billion from the 2012 listing while FGV received RM4.5 billion. However, both entities have spent the money on investments that are not yielding the desired returns.

To resolve the shareholding spread issue, the former chairman of FELDA, Tan Sri Idris Jusoh, proposed an issue of preference shares with the ultimate objective of FELDA reducing its stake to 75%, hence fulfilling the requirement.

FGV announced the proposal on June 30, 2023, which was Idris’ last day as chairman. His successor, Datuk Seri Ahmad Shabery Cheek, has not acted on the proposal.

The company has until Sept 2 to come up with a solution. Will Bursa Malaysia crack the whip if it fails to do so?

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