This article first appeared in The Edge Financial Daily on April 17, 2019

KUALA LUMPUR: Indonesia’s Rajawali Group has denied that it is pursuing legal action against Federal Land Development Authority (Felda), which has decided to exercise its put option to sell back the 37% stake in PT Eagle High Plantation Tbk to the Rajawali Group.

“Felda and Rajawali, or any subsidiary of Felda or Rajawali, are not or have never been engaged in any court proceeding,” Rajawali said in a statement, according to Reuters.

Felda paid US$505.4 million for the 37% stake in Eagle High.

The statement came after Malaysia’s Economic Affairs Minister Datuk Seri Mohamed Azmin Ali revealed last week that Rajawali had filed arbitration proceedings against Felda to prevent the latter from exercising its put option to sell back the Eagle High stake it bought from Rajawali.

Mohamed Azmin also said Felda would continue to pursue its efforts to exercise the put option regardless of the legal action. “Oh yes [we will pursue the put option],” Mohamed Azmin was quoted as saying when asked about the put option for Felda to sell its shares in Eagle High.

“Felda’s board of directors has decided not to allow any further extension to Rajawali ... which is why [Rajawali] decided to file the arbitration,” he told reporters after tabling the White Paper on Felda.

“We will go through [the arbitration] process. The stand and decision of the Felda board of directors remain the same, as they (Rajawali) already received an automatic six-month extension last year,” he added.

 According to Mohamed Azmin, Felda had filed a notice to Eagle High last year to exercise the put option but the request was rejected.