SUBANG (Feb 11): The Government will not interfere in the dispute involving Indonesian-based Rajawali Group's decision to challenge Federal Land Development Authority's (Felda) "put option" in court, to claim back more than US$500 milion which it had invested in Eagle High Plantations Tbk.
"The (Felda) board will look into this matter thoroughly. The Government does not interfere in the decisions made by the board," Economic Affairs Minister Datuk Seri Mohamed Azmin Ali told reporters at the sideline of the Chinese New Year celebration organized by the Malaysian Hokkien Association.
"Let the process continue. They should resolve this matter amicably," Mohamed Azmin said.
Felda has proposed to walk away from its partnership with Rajawali and demand back for the amount invested in the latter's palm estate and sugar manufacturing assets in Indonesia in May 2017.
Felda’s acquisition of a 37% interest in Rajawali’s Eagle High Plantations Tbk came with a “put option” that provides for the Malaysian concern to sell back the equity interest at the purchase price of US$505.4 million, together with an annual interest charge of 6% that must be borne by the seller.
According to reports, Felda board of directors had exercised the put option in a letter dated Jan 3, on grounds Rajawali failed to meet key conditions which include securing the Roundtable on Sustainable Palm Oil certification by the end of 2019, that would have given them access to key markets.
Rajawali had since informed Felda it intended to challenge the put option in court.