PETALING JAYA: Investors of the soon- to-be-defunct investment scheme Golden Palm Growers questioned the management company’s board members for five hours today, ruing its impending termination after seven years in operation, especially when the fresh fruit bunch (FFB) yield is expected to be on an upward trend.
“As the investors, we see that the fruits have started growing. We think probably this is the year that we could harvest most of the returns, but then we are so surprised that the company declared to close the scheme,” an investor who declined to be named told SunBiz after a general meeting today.
Golden Palm Growers Bhd (GPGB), the scheme’s management company, said in a statement today that 98% of the investors voted to give it a 12-month grace period to find a buyer for the 11,000-acre plantation land in Gua Musang, Kelantan. The other option was for an immediate sale of the plantation land.
GPGB executive chairman Datuk CRS Paragash said the company will not be taking anything from the final net sale proceeds until it has returned 100% of capital to investors as well as the payment of the 2017 net yield. GPGB holds a 40% interest in the scheme.
The company said its action committee will be authorised to approve all proposals for the plantation land that allow growers to get back 100% of their initial investment, while proposals that will return less than 100% will be open to growers’ review and vote.
An investor who joined the scheme in 2014 said the majority of the investors raised concerns on whether they will gain back their capital, as well as the 9% dividend that they were supposed to collect last month.
The management company had previously asked for a deferment in the yield payment this year, due to insufficient funds.
GPGB recorded RM3.48 million in revenue with net loss of RM23.98 million for the financial year ended June 30, 2016, based on its latest filing with the Companies Commission of Malaysia (SSM).
“Most of them also questioned the credibility of the (management) company. I think they have done really ‘poor calculations’ at the beginning of the project,” he added.
Asked how the management company responded to the investors’ concerns, the investor said GPGB noted that it is having cash flow issues to run the company, to pay the promised returns to the investors and to fulfil the investors’ repurchase requests.
The investors were previously promised that the management will repurchase their plots at full price anytime after year six.
However, the management company said that it was unable to fulfil the repurchase requests from investors of up to RM22 million and RM18 million for net yield payable to investors.
On Sept 6, the management company issued a notice to investors for a general meeting of the growers to determine the future of the scheme, with a recommendation to close or terminate it.
A number of investors during a recent forum with Minority Shareholder Watchdog Group (MSWG) met the SSM last week to lodge their complaints after receiving the notice on the termination of the scheme.
According to MSWG, SSM officers stated that, so far, the management company had complied with all provisions required under the law.
“However, SSM will investigate the issues based on the complaints made by the growers and has given the assurance that action will be taken if there is any breach of regulations under the purview of SSM.”