Political battles set to intensify in rural Malaysia

AN official admission that a Malaysian federal agency was "in danger" speaks volumes about the Najib administration's push to restore a sense of order and calm among its core rural supporters before calling a general election, widely expected later this year. On Monday, the newly appointed chairman of the Federal Land Development Authority (Felda), Shahrir Samad, even agreed that there was corruption within the agency, set up in the 1960s, to uplift living standards of the rural Malays.

Even more worrying for the Umno leadership are the affairs of a listed subsidiary of the agency, Felda Global Ventures (FGV), which has seen three CEOs in the past four years. Some 2.5 per cent of FGV shares was allocated to 112,635 smallholders who were settled on Felda-owned land in the 1960s as part of a national land distribution scheme. These smallholders were eligible to buy 800 shares each.

FGV began with a listing price of RM4.45 (S$1.42) per share in 2012. It is now trading at around RM1.87. This means that ordinary shareholders - and, more importantly - all those smallholders who had relied on these shares to provide for their nest-egg savings - have effectively lost more than 65 per cent of the value of their shares. It is telling that Mr Shahrir accepted his position on condition that Felda's management is separated from its subsidiary, FGV.