Privatising Bernas only feeds Syed Mokhtar’s monopoly, says Anwar

Datuk Seri Anwar Ibrahim said that with the rice monopoly, Tan Sri Syed Mokthar would gain the most as opposed to Bernas' original aim to help Bumiputera farmers.. — Picture by Choo Choy May
Datuk Seri Anwar Ibrahim said that with the rice monopoly, Tan Sri Syed Mokthar would gain the most as opposed to Bernas' original aim to help Bumiputera farmers.. — Picture by Choo Choy May

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KUALA LUMPUR, Nov 12 — The proposed delisting of Padiberas Nasional Bhd (Bernas) would place the country’s food security in the hands tycoon Tan Sri Syed Mokhtar Al-Bukhary and harm the Bumiputera involved in the rice industry, Datuk Seri Anwar Ibrahim alleged today.

The PKR de facto leader also pointed out that if Syed Mokhtar’s attempt is successful, his monopolistic control over the strategic rice business could only benefit the tycoon while potentially destabilising future prices.

“Why has the government digressed from its original intent in the formation of Bernas which was to protect the interests of Bumiputera farmers, distributors and Bernas workers? Is the equity ownership of these people in Bernas not worthy of the government’s protection, yet ultra-wealthy, politically connected individuals get all the privileges?

“We condemn the recent spate of opportunistic acquisitions by Tan Sri Syed Mokhtar as his intent to take full control over Bernas at the time when its rice imports monopoly was to continue until Jan 2021, since these would result in mainly profiting one person, namely himself,” he said in a statement.

Last week, Bernas proposed a voluntary withdrawal from Bursa Malaysia after it failed to get 90 per cent acceptance support from shareholders.

In an exchange filing on November 6, the company said the joint offerers and parties acting in concert to take it private had only managed to obtain 83.69 per cent shareholders’ support as of November 4, 2013. This means that the company does not comply with Bursa’s listing requirements of having at least 25 per cent public shareholding spread.

Syed Mokthar, who is the controlling shareholder, is trying to take Bernas private using his four companies — Perspective Lane Sdn Bhd, Kelana Venture Sdn Bhd, Seaport Terminal (Johor) Sdn Bhd and Acara Kreatif Sdn Bhd — who are the joint offerors.

His initial bid to take the rice industry regulator and distributor private in March failed as the tycoon was unable to receive sufficient shares acceptance from the minority shareholders.

The move comes days after Syed Mokhtar’s DRB-Hicom Bhd signed a deal with Ekuiti Nasional Bhd to buy its 61.61 per cent stake in Konsortium Logistik Bhd for RM241 million in a strategy seen as an effort to strengthen his logistics business interests that include ports and an airport in Johor.

Today, Anwar questioned Syed Mokthtar’s ability to obtain billions of ringgit in loans from Maybank Investment Bank, an arm under Malaysia’s largest bank and financial group.

Anwar also pointed out that Maybank Research has in February forecast Bernas’ revenue to rise to almost RM3.9 billion by 2015 from RM3.6 billion last year.

“Profits will surge by about 40 per cent to RM 165 million in the near term due to lower international rice prices which resulted from surplus production in Thailand, Vietnam, India and Pakistan. These will benefit any future owners of Bernas,” he said.

The bulk of Bernas shares is controlled by Syed Mokhtar through Tradewinds (M) Bhd (72.7 per cent of Bernas shares), which he privatised in March this year. The privatisation of Tradewinds triggered a mandatory general offer for Bernas and Tradewind Plantations Bhd.

Now Tradewinds directly owns nearly 72.6 per cent in Bernas, while his private companies Perspective Lane has 10.8 per cent, Restu Jernih Sdn Bhd has indirect shares of 83.3 per cent and Syed Mokhtar holds 392.1 million shares.

Bernas was privatised in January 1996 and assumed the role of National Padi and Rice Board (LPN) as regulator of the local rice industry.

On April 26, 2011, the government has announced that Bernas’ contract of rice distribution has been extended for 10 years starting from January 11, 2011 to January 10, 2021.

Bernas currently controls 24 per cent of the paddy market and 45 per cent of the local rice demand.

Bernas shares last traded flat at RM3.56.

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