i think there are ppl selling some plots online thru CHGS website. Each plot <10k still

I think investors should look into the concerns before investing in CHGS

1) The CPO operation cost is about RM 1200/ tonnes at this moment, up from about RM 800/ tonnes less than 5 years ago. Assume CPO price is RM 1200 a tonne, the company is paying 2% return. (let's ignore FFB production bonus) The operation cost is expected to increase and maybe 10 years down the road, it will go up to RM 2100/ tonne. Assume the CPO price is RM 2100/ tonne, is the company able to pay 12% return to investors when the cost alone is RM 2100/ tonne? Where the money comes from?

What I am trying to tell here is that the CPO payment chart doesn't work because it does not factor in inflation.

2) Did the prospectus spell out how the land to be sold after 23 years? If the real estate market is not doing well that time, are they going to hold? How long it takes to sell the land? And more important how soon can the investors get back their money!

3) The company said the return is guaranteed. Is it back by assets? If not, it is merely verbal guarantee. And mine you it is a private limited company

4) The boss is a very prominent businessman in Malaysia. If the plan is so good, do you think the public has the chance to invest in? Why not keep to himself or sell to his rich friends. It is easier to sell to his friends who can invest hige amount rather than having to manage so many retail investors.

5) If the plan is so profitable and safe, why not CHGS raise capital through debt which has lower cost of capital?

6) CPO has gone beyond RM 4700/ tonne and yet the plots were not fully suscribed yet. The total investment available for sale is less than RM 400 millions. It is coming to 3 years and the plots are still not fully suscribed. Few billion units of ASM and ASW 2020 which seems to have lower return were snatched up by Chinese investors within hours! Investors lack confidence is the scheme.

7) Since the company thinks the scheme is so profitable/ certain (the slogan is Invest in Certainty), why not the company offers guaranteed buy-back after the trees start to yield?
8) There were 18,000 oil palms damaged by wild elephants at Gua Musang in April 2009, causing massive loss to a company. Have sufficient measures being taken to mitigate this risk?

9) Track record of the boss Lee and Country Height Group is not so convincing. Look at the winding up of Min Hotel, Lake Front Business Centre owning local authorities up to million of assessment fee (it was reported in year 2006), check with the buyers of college height, Pajam and see whether they are happy with the company, if you happened to visit Mines Wonderland, you will be appalled how the ice sculpture look like, poor customer service, delay in payment etc...

10) The investment is very illiquid. Once the company cannot fulfill his payment, investors will rush to sell the plots... Do you think you can sell then?

Dear all

I'm reaching out to all stakeholders of this scheme.
Some of you have already been informed by CHGS that a Voluntary Termination of the scheme has been proposed, and that it shall be passed upon approval of 3/4 in value of Growers present in the forthcoming General Meeting.
I find the following facts to be incredulous:
1) The GM is scheduled on 8/2/2013 i.e. the day before CNY reunion dinner. This restricts the attendance of many outstation growers who have to travel back to their respective hometowns. I find this rather suspicious as it is likely to reduce the number of attendees for the GM.
2) 10% of our investment shall be paid within 30 days, BUT 90% shall be spread over 2 years AND there may be NO GUARANTEE that we may be paid in full.
3) The "rationale" behind the termination is flimsy at best:
i) Soil Fertility - Was there not a proper soil investigation conducted prior to launching such schemes? Obviously, either such investigations were flawed or the company chose to overlook some risks/assumptions;
ii) Uncompromising Terrain - Did the site SUDDENLY become hilly which "affected the average number of palm stands that can be achieved"? Surely a feasibility study would have pointed that out before a single seed was planted.
I do not wish to pre-judge the GM but I have plenty of questions to ask. However, I fear the numbers may be few and far between. I therefore wish to spread the word of the importance of the meeting amongst growers and what is at stake.

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.... "

All these discussion of what to do etc is a waste of time.

Either you have 25% of the votes to scuttle the proposal or you have to accept whatever liquidation money they decide to give you, and it will probally below your investment cost.

Basically no need to discuss anymore, they are out to eat you alive, get as many people to attend and vote NO! That's basically all you all can do.

IMHO i think the management already have >50% votes (including proxy) in hand, otherwise they will not dare to propose such a termination and have the minorities shoot it down. I am sure they have all the time to prepare for everything and rigged the votes in your favour. If you are them, will you not do so?

This deal is very similar to the one done by Glenealy plantations recently, in which the minority shareholders stormed out after outvoted by the management...

Not really, if you look at the FY13 proforma accounts, they have fantastic profit buried in the back pages of the proposal. Gross profits margin >50%, net profit margin >30%. 

It's a fantastic business, why else do you think the owners want to take it private. They paint a bleak picture to 'entice' the minority shareholders to sell it to them...

That is why they want to take over before the payment date on 14/02...so no need to pay the dividends.

Also there are no sign of accounts manipulation, all is proper, except the management give a bleak prospects for the future. Future earnings are anyone's guess. So this is not accounts manipulation.

They only need 75% of the votes present to force you to sell as per listed in the circular. If only 100 people come to EGM, 75 person vote yes, means the whole proposal goes even though the other 20,000 people did not attend they are forced to sell their shares.

The management have decked all this in their favor, expect 200-300 proxy which is pro management to be present at the meeting, including lawyers, con-sultants, accountants and lots of bouncers...

However all is not lost, as long as the minority shareholders can muster enough votes in they can break the 25% barrier.. but is those minorities as organized as the management? The management have lots of time to prepare, the minorities are running around like headless chicken and have 1 more week to go...

Well the circular proposal is a legal document and need 75% votes to approve as per written agreement between the company and investors. There is nothing to dispute as it is black and white and all growers agreed to this when they agree to join the scheme. It is just that they never thought it can be used back against them. 

Read Clause 17.1 of the trust deed you sign when you joined the scheme...

Pursuant to Clause 17.1 of the Trust Deed, the CHGS may be voluntarily terminated by resolution passed by a majority in number representing three-fourths (%) in value of the Growers present in person or by proxy at a meeting of the Growers to be convened in favour of any proposal made by PGCB as an alternative to the CHGS.

Really really smart and overpaid lawyers which made the agreement in the management favor... 

Don't think so, the clause is listed very very clearly, and the growers signed every page of it. The clause is not manipulated, it is doing exactly what is written in the clause. A clause can be used for good and bad reasons.

In the eyes of the court the agreement is legally binding and not challenge-able.

Plentiful Gold-Class is a wholly owned subsidiary of Bee Garden Holdings Sdn Bhd, a company in which Puan Sri Tan Bee Hong, wife of Tan Sri Lee Kim Yew, is a shareholder. (Lee is the founder of property development and management company Country Heights Holdings Bhd. He also sits on the board of Plentiful Gold-Class.)

CHGS latest prospectus has on pages35 to 51 their audited a/c to 2010. It show PGCB has good revenue from both their LahadDatu and GuaMusang plantations at RM11.9Millions giving Operating Profit of RM3.9M combined, 33% margin. In the termination Circular, they claimed as "extracted audited" figures for GuaMusang plantation as RM0.7M revenue and Operating Loss RM1.2M. By deduction, their LahadDatu estate would be RM11.2M with Operating Profit of RM5.1M , fantastic 46% margin !!!
 
Figures don't look right for GuaMusang estate. Why the expert independent advisers Andrew Heng and Ong Tee Chin did not notice this?

As mentioned earlier the 2012 Prospectus is highlighted below. Please read up their full proposal in their web site.

PLENTIFUL GOLD-CLASS BERHAD
Incorporated in Malaysia (Company No: 576102-V)
PROSPECTUS
(ISSUED PURSUANT TO SECTION 90 OF THE COMPANIES ACT, 1965)
OFFER FOR SUBSCRIPTION OF OIL PALM GROWER'S PLOTS
THIS PROSPECTUS IS DATED 8TH JUNE 2012 AND EXPIRES ON 7TH DECEMBER 2012

1.1 Prospectus
The Management Company is the registered lessee of the Land and proposes to establish the Scheme as an oil palm sharefarming scheme in respect of 10,000 acres comprising the Plantation for a period of twenty-three (23) years commencing from the Planting Date and expiring on the Maturity Date.
The Scheme will involve the offer to the public for subscription of Grower’s Plots in respect of and, connected to the Plantation. Each Grower’s Plot interest is connected to a ¼ - acre plot within the Plantation. The Grower’s Plots are established pursuant to Section 84(1)(b) of the Companies Act 1965.
The Grower’s Plot had a subscription price of Ringgit Malaysia Five Thousand only (RM5,000-00) at the Initial Launch and all subsequent Grower’s Plots will be at such price as shall be stipulated by the Management Company from time to time based on market forces. With effect from the date of this Prospectus, the revised subscription price of each Grower’s Plot shall be Ringgit Malaysia Ten Thousand only (RM10,000.00)
As at the date of this Prospectus, the Management Company has established forty thousand (40,000)
Growers’ Plots under the Scheme of which thirty six thousand (36,000) Grower’s Plots are intended for public subscription and remaining four thousand (4,000) Growers’ Plots are designated as Reserved Grower’s Plots not for subscription and may be released for public subscription only upon the approval of the Registrar of Companies.

I myself not a Grower but assisting those who complain the proposed termination.

I am wondering why so many investors got into this scheme with such a high cost of RM49k per hectare, some more put money into the mouth of LKY . With such a high cost, CHGS owed the Growers $ without having enough asset to back the claim, no wonder the IA mentioned Growers may not be able to get back your principal in full, so Growers are screwed from the beginning is true .

When I 1st come to know CHGS, I don't even really bother to read more on the brochure even it looked attractive with guaranteed return, as I totally avoid any scheme launched under the deck of LKY. This is a lesson we should learn that never trust big croc.

It is now reported that they have shutdown their CHGS.com.my website and redirect you to google.
This is most likely to prevent us from getting more details.