Country Heights Grower Scheme, hmm, I remember their advt on the Radio last year featuring an 'Indian sounding old man' telling investors about the Guaranteed 8% returns, where to find, etc and increasing to 12%.

Its safe to say that LKY is a good businessman but he has little understanding on how financial instruments like Bonds and Trust Schemes work. If you Google you can find that many years ago, Country Heights was burnt badly by such financial instruments.

The current problem is that LKY wants to wind up the Scheme without paying the final dividend and says he needs up to 2-years to return the Capital.

While the final dividend can still be swallowed, the 2-years to return Capital is just too long and hence, the grouse cos there is also no additional interest during this 2-years.

Just by depositing an equivalent of RM215 mln (or there abouts) and getting just 3.5% for 2-years, the lost compounded interest is RM15.30. million.

But the risk in CHGS defaulting on the Trustee taking over is not all that bad, provided they appoint a Good Manager to manage the Estate. But what sort of Mandate will be given.

Honestly, any company that guarantees 12% return year-on-year is just asking for trouble. Not even Warren Buffet will give such a guarantee.

So, the new Mandate to the Estate Manager is that 100% of profits should be given back to investors. Profits means Revenue less All Associated Cost including Replanting Reserves.

But this will mean that the return will be substantially less than 12%, if you are lucky it will be about 6%. Why do I say that.

Cos if it can give 12%, you can bet that the Govt proxies, such as FELDA, EPF will be lining up to take over this company.

So, its up to the Investors. What do you guys want?

1) Take LKY Offer

2) Take MSWG Offer - which is to take the 12% dividend, 10% Capital now and Bal 90% in 6-mths. However, CHGS does not have the money and you will have to sue LKY / Bee garden. Who is going to pay for the Legal Fees

3) Let it default and Trustee appoint new Estate Manager and see how it goes. After all, 6% is still better than any FD.

The General Meeting will only be held this Friday, 8 Feb 2013. They need 75% votes, either by in-person or by proxy.

Watch out for some not clean tactics to deny certain proxy holders from attending and/or voting.

Guys, if you have the time to read the Circular here

http://www.chgs.com.my/download/CIRCULAR%20-%20CHGS.pdf

it makes you wonder if CHGS really knew how to properly manage a Palm Oil Plantation.

Please read this Circular so that u ask them detailed questions.

Perhaps someone can cross check to their Original Prospectus and hammer them. Start that time, all the factors save for Minimum Wage was already made known, i,e,

1) Weather is always uncertain
2) Terrain is not Flat - its not like there was an earthquake and the terrain changed overnight
3) Elephants, etc is also already known issue.

So, what changed from the Prospecus?

1. Who did u appoint as your proxy
2. Did you indicate how you wanted your proxy to vote

Of course the receptionist is scared, this is a major thing for the Company and Promoters. If staff say the wrong thing, can be sacked immediately.

As Falsealias said, you either vote

1) For means you accept LKY proposal - means no 12% dividend but you get back 10% Capital immediately and balance 90% within 2-years.

2) Against means you do not accept LKY proposal. This means that CHGS must pay the 12% dividend which they claim they do not have the Cash. This will mean that CHGS has defaulted and in accordance with the T&C, the Trustee that you appointed many years ago will take over from the current Management and appoint Receivers & Managers (R&M) to run CHGS. However, as my last post, what is unclear to me is the Mandate to be give to the Trustee / R&M, to continue running the Company or to liquidate immediately.

Okay, after reading the Circular, you are right. I said that Trustee will take over cos its what LKY said. In this case, then, its may be worthwhile to Vote Against to see what happens right? Growers can then technically call for another EGM to appoint a new Management Company to better access the actual situation in CHGS instead of just relying on the current Management Company.

This post has been edited by cfa28: Feb 6 2013, 05:25 PM

Wow, the sudden change of heart must mean that LKY really wants to take the Estate private. However, the Resolution still stands and cannot be amended that CHGS does not pay the current year Dividend.

The RM25 mln is a separate Agreement between LKY and the Growers, Who is going to ensure that he keeps his word? Ask LKY to issue a Bank Guaratee to CHGS.

Hmm, there is more to come...

The 3 elements to seal a binding contract:

Offer - LKY has offered RM25 mln to Growers to pay CY Div and 90% Capital back within 6-mths in exchange for Growers to support the Resolution

Acceptance - Growers have accepted the Offer

Consideration - Voting for the Resolution can be deemed as the Consideration

The only problem is getting the $$$ to sue his a55

You cannot have an improved Voluntary Termination proposal. This is not in accordance with the equivalent of the M&A of CHGS. Notices must be send, etc. If there is to be a vote for improved Proposal, the Meeting tomorrow must be cancelled / adjourned else it will be null & void.

If LKY banks in RM25 mln to CHGS for CHGS to pay the Dividend, the Meeting tomorrow can be adjourned cos CHGS will have the $$$ to pay the Div.

New Notice for Meeting with details on improved scheme needs to be send,. etc and Growers can then vote.

If I were a Grower, I would Vote AGAINST and I would advice all growers attending the AGM to vote AGAINST.

If you believe the newspaper, LKY said that based on the proxies received representing 15% value, only 50% votes FOR. Hence, if the ppl attending vote AGAINST, the VT is dead.

You need 75% support to pass.

Latest from STAR - News seems incomplete and I think there is an error. Says only 8.49% voted for VR. Is it 84.9% or 8.49%



KUALA LUMPUR: Tan Sri Lee Kim Yew, the founder of Country Heights Growers Scheme (CHGS), had during Friday's morning meeting with the shareholders gave his personal commitment of RM25mil as a ”goodwill package”.

The meeting, which saw more than 1,300 scheme investors attending, he was also to put his commitment in writing by the trustee of the company.

An investor had proposed the meeting to be adjourned to a later date.

The investors of the scheme also requested Lee's personal commitment on the goodwill package and payment be made within six months.

As at about 12.30pm, 8.49% of the investors had voted for the termination