This article first appeared in The Edge Financial Daily on November 13, 2019

KUALA LUMPUR: The High Court yesterday told Golden Palm Growers Bhd (GPG), the management company of the Golden Palm Growers Scheme (GPGS), to pay monies due and owing, plus guaranteed yields, to GPGS investors, as the scheme was ordered to be wound up. The court, however, did not state the amount of money the growers are claiming. According to previous reports, they are claiming some RM36.5 million.

Above that, the growers are entitled to the net yield of the scheme for the past three years, namely the years ended Aug 20, 2017, 2018 and 2019.

The court ordered GPG legally to buy back plots from growers at the original purchase price, subject to the limit of 10% a year.

A GPGS liquidator will be appointed in line with the court’s verdict yesterday. If they fail to agree on the liquidator, the court will appoint a liquidator for the process of winding up the scheme.

The court discovered that the scheme is no longer viable and that there is a complete loss of trust between the growers and the management company, thus it is not in anyone’s interest to continue with the scheme. The scheme wind-up, however, does not absolve GPG from its liabilities to the growers.

In October 2017, 98% of GPG voted in favour of giving the company one year to look for a suitable buyer for the Kelantan plantation, as opposed to an immediate sale to recover their capital.

However, the growers claimed that the 2017 resolution was obtained by misrepresentation, and is therefore invalid and void.

The investors have previously claimed that the investment scheme, which involves the investors or “growers” pooling money for the operation of a plot of oil palm plantation land in Kelantan, is a Ponzi scheme.

Following a general meeting in April — which the growers voted against granting extension time for the realisation of the land sale, GPG filed a High Court application to wind up the share farming scheme.

But investors contended that if the scheme is closed based on GPG’s application — that it was a valid and not an illegal scheme — the investors will get nothing in return.

This prompted the counterclaim by the growers.

The GPGS was launched in 2010 as a 23-year scheme ending in 2033. On Sept 6, 2017, GPGB issued a notice of meeting with growers to determine the future of the scheme, proposing an early termination by selling the plantation.

GPG promised scheme investors a guaranteed net yield of a minimum 6% yearly and discretionary bonus during the first six years of the scheme. From the seventh year onwards, investors were supposed to be entitled to a prorated share of profits each year, with a minimum return based on average crude palm oil prices.