Major shareholder trying to use current low CPO price to "sapu" minority shareholder's stake ? Now the CPO price is low, the valuation will also be low. From what I heard, even if the CPO price is at RM1500-RM1800, plantation can still breakeven.

Re-look at the original agreement. What are the rights of the minority shareholders ?

Some of the possible steps to take :

request the company to appoint an adviser for minority shareholders. The advisor is usually a consultant from audit firm. He/she should be given time to study and advise the minority shareholder what is the best course of action.

Make complaints to BNM/SC. Ask them for advise

Get a lawyer and apply for interim injunction to have more time to study the agenda

It sounds like it. Looks like the minority unit holders' interest is capped (can receive only lower amount) while the management got all the upside (if CPO price improves). Does this practice tantamount to "oppression of minority shareholder" in the Companies Act ?

The management should offer an option for all unit holders to fore-go (or reduction of) dividend for 2012, since the management says the profit is no good. Then the EGM should approve the management to find a buyer for the plantation. The proceed from sales of the plantation should be divided equally by the unit holders. This way, all parties share the risk (and potential gain, of course)

Based on what it is posted here, the management is open to criticism of being "taking advantage" of the minority unit holders by limiting their own risk, while open to the upside in the event that CPO price and fruits yield rates improve

But time is against the minority unit holders. Hope some of the unit holders are in the legal profession and can take steps to buy more time to appoint consultant who will be tasked to look into the exercise from the minority unit holders' interest point of view

The management is really good businessman ! They let the public to bear the risk of initial years. Pay them slightly extra return to rope in the capital

When the project can't sustain, then dissolve it. No harm done.

If the project is viable, the management even have to option to kick them out just before the trees are in the prime production period

Have to learn from them !

Big Fish always win. This story tells us in all investment, no matter how good it looks like, there is always risk. High risk high return. Low risk low return.

On the hindsight, how much is the return to the investor ? Let's do a simple calculation

Buy on 1/1/2007 RM5000
Get 1st dividend 1/1/2008 8%
Get back RM500 in 2013
No dividend for 2013, 2014 and 2015
Get back RM4500 in 2015

Returns
2007 0%
2008 8%
2009 8%
2010 8%
2011 8%
2012 12%
2013 0%
2014 0%
2015 0%

Simple interest calculation (not NPV), the average return over the 9 years is 4.89% pa.

Actually not too bad (based on the above dividend rate) compare to FD which is risk free. Provided the growers will get all the capital back (RM500 + RM4500) by 2015

But of course, the promoter gain the most as it got cheap funding for a high risk business

The growers should just accept the proposal and forget about the whole thing. Go enjoy the CNY holidays instead of attending the meeting. The most you can do is don't get involve in the future with investment which got anything to do with the promoters of CHGS.

The growers are 100% better than those Genneva investor. Consider yourself lucky because at least the promoters promised to pay you back the capital, although it is 2 years from now. I think the rich bosses will be happy to "honour" his promise and pay you back the money in 2015 and say "thanks for the cheap funding, anyway.... "

Yea, the 2012 dividend is payable in 2013. So 2013 is nil dividend payment. I look at cash inflow and outflow point of view (my chinaman business approach )

I understand where you come from.

It actually depends on how you look at the whole investment from day 1 to 2015. No right or wrong. It will be a "decision" to be made by individual grower.

Genneva investors were promised 24%, and many lost 100% of the investment. CHGS investors were promised 12% (or was it 6% + bonus which depends on CPO price), and got 4.89% and 100% of the investment back.

Depends on how you look at the investment with 1/2 glass of water in it. Whether it is half empty, or half full.

This post has been edited by EddyLB: Jan 25 2013, 01:37 PM

Do you guys realised the agenda of the meeting on that day itself ?

It has only 1 agenda for the day. You either vote "for" or "against". The flow of the meeting on the day would be :

1. 10am sharp, Chairman of the meeting confirm the quorum
2. Chairman read out the proposal.
3. Someone from the floor (probably a guy planted there) would propose
4. Someone from the floor (also a guy planted there) would second
5. Chairman ask the floor for poll
6. Chairman announce the meeting approve the agenda
7. Chairman thank the floor and announce dismissal

Everything will kaotim in 3 minutes. If there are questions in between, the chairman will shoot it down fast.

There is no agenda for you guys to discuss, to ask question, to propose another resolution or for anything else except to vote "for" and "against". And you guys should expect "the other side" already have enough votes to vote "yes" to the proposal

Are you guys prepared ? You guys got to appoint a few spoke person to stop the chairman. Hopefully some lawyers who are also growers can be in the meeting to stop him. If not, the meeting will be over before you all can react. The big shot has all the experience in this type of meeting. They come prepared. I am sure they even get ready enough security guards to chuck out anyone who make a scene in the meeting room. Whereas I see you guys are just preparing to meet somewhere and the venue is all scattered and not even confirmed ! How do you guys have consensus on what to do ? Do you guys have any lawyer and accountant to answer your questions in your meeting ? You guys got to have a united game plan to take on the big fish

Yes I think the right strategy for minority growers now is to push for adjournement of the meeting. Talk about what to do later. You need more time to think of the right course of action. Consensus among yourselves alone would take months. So in your coming meeting, just ask everyone to vote for adjournment. Don't need to talk about what / how / but / if. If possible go for 1 big meeting in 1 location instead of many small meeting in different location.

But I have the following questions on the day of the meeting :

1. On paper, you have the rights to appoint chairman of the meeting. What if they have lawyers on the spot to dispute your claim ? Do you have a lawyer to represent you and make sure your rights is preserved ? They can just bulldoze through by claiming some provisions in the prospectus. What are you going to do ? They are on the stage, and you are on the floor. And when the resolution has been passed, you can only bring this case to court, which is time and money consuming

2. Everyone now knows which side got more votes would win. The management knows for certain how many % of votes they have. How about you all ? Do you have even 10% of the votes ? 10% = RM20+ million ? You got to compile what % you have and then keep it a secret so that the other side don't know. That's why it is good to compile the list of attendee and proxy so that you know for sure what is your strength.

This meeting is the do or die meeting. You have the numbers, you win. You don't have the numbers, you lose. Don't waste time talking about how/where you want the Scheme to head to or kick the management out. That is only relevant if you manage to adjourn the meeting

Good luck !

I am not in legal profession. It was just my observation thru attending many AGM and EGM of public listed company. Those boardroom tussle and battle for control etc

Bro,
They don't have time to entertain you. If you can't elect your chairman, you are gameover

Jeffayn already refute all your points convincingly. You got to accept they are the big fish. They have done this type of corporate exercise many times. They can afford the best lawyer, consultant, accountant, company secretary in town. They won't make mistakes you can type it out in 3minutes. Remember all the cost for these lawyers, consultants etc are borne by the scheme, ie you the growers. They don't need to come up with a single cent.

If you all still do not have a lawyer by now, I wish you luck. You guys need lots of it

Falsealias and mkhor7,

Yes, the battle is dependent on how many horses you have. In fact how many big horses you have (not small horses)

Let's assume the management has RM25 million. I think they should have 10% of the scheme. And they will make sure the RM25m will be there to vote.

To assume the role of chairman, you need RM25m + RM1. Do you guys have it ?

In the event you guys fail to take over the chairman's role, you still can stall the proposal by having 25% of the votes in the meeting. Your number of votes you require is about RM9 million. You guys should work towards this number. It seems attainable if you guys manage to contact more growers

The above numbers are just assumption. One of you shall go find out from the registrar the top 200-500 investors. How much total these 200-500 investors hold. What you guys need now is RM votes (big horses), not number of voters (small horses). Ask these big investors to attend your meeting. From there, you can gauge whether you guys have a fair chance. If most of them are "for" the proposal, then you already know the outcome

If you guys can find only those 1-2 lots investors to attend your meeting, then it is very difficult to get the RM votes

If I am not wrong, you can go to the registrar / company secretary office and view the register with advance notice.

The fact that they sent out the notice with only 21 days notice and pick the eve of CNY holidays for meeting suggest that this is all pre-planned. It leaves very few options for the growers to react in such short time, and even fewer growers will attend. If you are in Sabah, Sarawak, East Coast, Penang, Kedah, Johor, I am sure very few of these growers will attend. Even if you are in Perak, NS and Melaka and choose to attend on the 8th, after the meeting at 10am your journey through PLUS highway back home will be horrible traffic jam ! That will again deter some from attending.

Another possible avenue would be for some grower to try to apply to the court for injunction/interim injunction. Don't know whether this is workable but again, that would involve a lawyer which cost money.

Whether there is malpractice or evil intention to "eat up" the minority growers, it is still premature to judge.

Like gark said, there is no point to talk about whether the management failed their duty, or what should be the future direction of the scheme. During the meeting, most likely the management will succeed in pushing through the proposal, and everything is history

The main concern now is whether the minority growers have enough votes to stop the proposal. They can either

1. Vote in a friendly chairman. You need 50% of votes to succeed. If the management has RM25m vote, then you need more than RM25m

2. Failing to vote in a friendly chairman, the minority can still stop the proposal. I suspect maybe, just maybe, RM9m worth of investors would be enough (just my guess). To gauge the actual value needed, the leaders of the minority interest needs to find out from the register of members who are the big investors and gather their support

or

3. Some growers come up with a sum of money to engage lawyers and ask for their opinion. Maybe apply for injunction to stop the meeting from convening. After the meeting is postponed by court order, the leaders of the minority interest have more time to contact more growers and oppose to the management. With the extra time, the minority interest can gather the consensus among themselves to decide the future direction, or negotiate with the management on shorter refund period, or change the management etc etc

Unfortunately time is not on the side of the minority growers. Someone needs to act quick. Otherwise, the episode is just another lesson teaching us "please don't fight with the big fish. They always win"

+1

No point talk about future. If the meeting approves the proposal, then the minority growers' next meeting agenda is to talk about pooling money and sue the management in court

What the small growers should do now is just concentrate on getting as many votes as possible. You guys got to focus on 1 objective only. Do a count of how much RM votes you have in your pocket. They have at least 10% minimum = RM25m. Maybe they have another 10% / RM25m from their business associates. So you guys need maybe RM9m-RM18m to deny the 75%

Seems that nobody would consider hiring a lawyer to apply for an injunction. This may be a better bet. No small grower is a lawyer to advise whether this is viable ?

I don't see someone emerge as a leader to lead and tell the investor exactly what to do. The leader should talk to the politician, ask the media to publicise, spread the news in cyber world, Do a youtube video etc. Only 1 objective that needs to be achieved - to gather all growers together. Just ask the growers to attend the meeting. If they can't attend, send their proxy to a list of persons

Anyway, hope you guys can pull it through. It is disheartening to see the big fish does what he wishes

Michael, you have the quality to lead the minority growers. You have been in The Star. What hold you back to take charge ? Why not you (possibly with another 2 persons like Falsealias) go and talk to LKY about what you guys want from him before the meeting. I am sure LKY would be happy to meet you to resolve the issues before the meeting.

With his experience, I doubt he will make such "breach of contract" mistakes. He has a whole legal department full of lawyers to study, plan, and execute his plan for him. The proposal papers, what to present to the growers, which consultant he pick to advise the minority growers (and what the consultant writes in his report), when to send the proposal, what date to hold the meeting, who will be the chairman of the meeting, who will be his proxy, how many votes he has to vote in the meeting, right down to how many security guards present at the meeting are all pre-planned.

And he and his team of staff who draw high salaries will make sure everything in this exercise will be in accordance to the law and contract.

The only uncertainty to him is the number of votes that will go against him during the meeting

Show him for once, money cannot buy everything !

Victory to the minority growers !

Salute to MSWG

Just 1 question : What will happen to those proxy form which has marked "opposed" to the proposal ? What if those proxy form votes have >25% and the resolution cannot passed through ?

Good point !

LKY is in effect asking the growers to trust his words. He wants the growers to pass the proposal first. And separately he will make sure the growers get the 12% dividend, plus get back the original capital in 6 months

Further question....What is he eats his words ? What if he later say the newspaper mis-quoted him ?

This post has been edited by EddyLB: Feb 7 2013, 06:21 PM

But LKY said in the press conference "....he would fork out RM25 million to the voluntary termination scheme on condition that the resolution passes through tomorrow."

He doesn't want adjournement. He is saying if you vote "yes", I pay you money. If you say "no", then I see how....