Kuala Lumpur (The Star/ANN) - Today is D-Day can Tan Sri Lee Kim Yew get the mandate to terminate the controversial growers scheme that he believes should be prematurely ended?
Lee is the founder of the Country Heights Grower Scheme (CHGS) and today's general meeting has been called by Plentiful Gold-Class Bhd for growers who had bought plots of the oil palm plantation in Kelantan to seek their vote to end the 23-year-old scheme. Plentiful Gold-Class is the management company of the CHGS.
The scheme was first launched in 2007, promising great returns. The growers were guaranteed an 8% yield for the first three years and returns based on average crude palm oil prices and fresh fruit bunch tonnage for the next 20 years.
On Jan 17, Plentiful Gold-Class revealed that good returns to produce enough to pay investors their guaranteed yields could not be assured due to unsuitable terrain and bad weather.
Although for the past three years the scheme had paid 8% yields, it could not fulfil the next payout due on Feb 14. Failure to pay would mean a default, with the appointed trustee taking over the estate in the event such a thing happened.
Lee has come out with a refund plan but the growers are unhappy with the conditions, as no one wants to wait two years to get their monies back.
The growers went viral on blogs discussing the issue, and their cause was also championed by the powerful Minority Shareholder Watchdog Group (MSWG), which felt the conditions of the termination were unfavourable.
Its chief executive officer, Rita Benoy Bushon, who has been vocal in championing the cause of minority shareholders, stuck to form and asked for a postponement of today's meeting and a review of the conditions.
However, in an interesting turn of events, she declared on the MSWG website that she had bought eight plots under the CHGS, leading Lee to promptly issue a complaint to the MSWG that there might be vested interest in the fight for a better deal for the growers.
Although it would appear at the outset that MSWG was indeed working in the best interest of the growers, it could now be suggested that there was more to the issue than meets the eye.
However, to be fair, Bushon could have bought the plots before she became the CEO of MSWG.
Subsequently, a day after issuing the complaint, Lee called for a press conference, with the advisory stating that Bushon had to be in attendance. However, she was a visible absence at the event yesterday, with Lee saying she had another meeting to attend.
Interestingly, before the press conference, Lee was in a philosophical mood, touching on a wide range of issues from how people tended to get emotional and start fights to the need to be honourable and the importance of trust. He also read out a poem based on the teachings of Confucius.
Taking the cue from the great Chinese philosopher, Lee took a conciliatory route at the press conference, declaring that he wanted to make peace with Bushon.
In a last-ditch effort to get the growers to vote in favour of a termination, he announced changes to the conditions so that they would get a better deal. This, he said, had been discussed with MSWG. The growers, Lee guaranteed, would be paid within six months instead of the earlier stipulated two years.
Whatever the distraction, the growers have to decide what's best for them today. At the end of the day, it's their money and investment decision.
Like all investments, some flourish and some sour, but the onus is on companies to make timely disclosures so that the investing public can make the right investment decision.
If Lee knew the yields were not going to be there, could he have not alerted the growers earlier? Alerting the market beforehand instead of throwing a bombshell at the last minute can help investors make more informed decisions.
So, timely disclosure and guidance is key.
And finally, let's not get distracted from the main issue here, i.e. the early termination of the growers scheme and the guaranteed payouts. It's not about who owns what.
Deputy news editor B.K. Sidhu wishes all the readers a very prosperous Chinese New Year.
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