Is Felda into the business of selling heirlooms?
Investment decisions by right must take into account profitability, cash flow considerations, gestation periods, and exit strategies.
By TK Chua
Can we see the foolishness of these statements:
- “I do not deny that leakages occurred and many complained that Felda made decisions to engage in unprofitable ventures. It impacted our finances and that is why we are selling our shares in Maybank.”
- “We are not using the proceeds from the Maybank share sale to pay for the EHP (Eagle High Plantations) purchase. The monies will be used to pay for management costs which will benefit the settlers, other than to balance out the cash flow of Felda and its subsidiaries.”
Seriously, I’m beginning to question the calibre of the corporate figures in Felda who have rendered this once eminent organisation to a shadow of its former self.
For goodness sake, why are we diving into the mud on everything we do? Where are the lessons learned and the accountability for past responsibilities? Is this all we got, selling the jewels and the golden goose to raise cash to pay management costs to benefit the settlers? What about the leakages that caused the problem to begin with? When are we going to plug those? If this is the way to go, frankly, we do not need Shahrir Samad as the new chairman of Felda.
Felda settlers should be paid from profits and income generated from its business/investment activities, not from selling its jewels and assets. There is no “extra earning” from selling assets. You are just generating a one-time cash flow, that’s all. After selling the jewels, may I know what the future holds for Felda?
Why is Felda only now talking about unprofitable, non-strategic and non-synergistic investments here and abroad? When alarms sounded earlier, no one seemed concerned. We let the big wigs in Felda to do whatever they pleased.
Why do we now need Shahrir to tell us there were leakages and unprofitable ventures incurred by Felda? Worse still, do we need him to tell us Felda must now sell its better assets to raise cash to keep the organisation afloat?
For goodness sake, why are we only good at closing the stable door after the horses have bolted?
If Felda needs to sell its Maybank stake to raise cash, it shouldn’t be thinking of another borrowing to buy EHP at the same time. Are there reasons to justify that EHP is a better investment than Maybank? My concern is Felda may be selling a better asset in exchange for a lousy one. How then is Felda going to keep itself afloat going forward?
When a business entity needs to resort to fire sales of its most valuable assets to raise cash, the problem is usually quite terminal already.
It is rudimentary to note that investment decisions must take into account profitability, cash flow considerations, gestation periods, and exit strategies. I think the problem is that none of these traits are evident in Felda.
If there is no accountability for past responsibilities, there will be no lessons learned. We are destined to repeat the same foolishness everywhere. Has this not become the hallmark of Malaysia today?
TK Chua is an FMT reader.
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