RM344 MILLION RINGGIT SUIT AGAINST FELDA

PRESS STATEMENT

17 June 2011

711 SETTLERS FILE SUIT AGAINST FELDA FOR FRAUD & BREACH OF TRUST CLAIMING LOSSES OF UP TO RM344 MILLION RINGGIT

This morning at the Temerloh High Court, 711 FELDA settlers from 16 Rancangan Felda Jengka in Jengka Pahang through their solicitors M/s Daim & Gamany, filed a suit against FELDA (1st Defendant) and FELDA Palm Industries Sdn Bhd (2nd Defendant) for fraud and breach of trust.

The settlers were contractually bound by the 1st Defendant to exclusively deliver their oil palm yield (hasil sawit) to the 2nd Defendant and they have always been paid at a lower rate of the oil extraction grade (Oil Extraction Rate (“OER”) for the last 15 years – averaging at 18.5% as stated in the Akuan Penerimaan BTS i.e. the receipt that is given for each truck delivery of fruit bunches. There is no clear basis or information on how the 2nd Defendant came to these different rates which were given on a daily basis at the point of each delivery.

The settlers suspected something were amiss when they realised that they could never match the recommended rate from the Malaysian Palm Oil Board which was higher. In January 2010, the Federal Court ordered FELDA to pay 11 million ringgit in damages to settlers in the Kemahang 3 scheme in Kelantan for cheating them over the oil palm extraction rate.

The settlers through their representatives sent random samples of their fruit yields to independent laboratories to assess the actual rate of the OER. The results from the lab tests showed a much higher average rate of 27%. This would mean a difference of an average 8.5% over the rate used by the 2nd Defendant.

We have evidence to show that in the year of 2008, the 711 settlers from the 16 Rancangan Felda in Jengka had delivered at average yield of 120 metric ton per settler. The settlers were paid by FELDA the average price of RM560 per ton the same year. Using the figure of 8.5% lost to the settlers, FELDA has caused a loss of RM257.60 per ton which works out to about RM30,912.00 to each settler for the year 2008 alone.

FELDA has also deducted their fruit yields improperly by deducting an average of 200 kg per month for disqualified fruit bunches but they did not return the fruit bunches to the settlers. This led to a further loss of RM 560 x 2.4 or RM 1344 per year per settler or RM 14,333,760 for all the settlers over the 15 year claim period.

This means that over the last 15 years, FELDA has caused a loss to these 711 settlers to the tune of more than RM344 million.

Through this writ summons and the process of discovery in court, we will obtain the exact production figures for all the other schemes involved here to compute the exact loss over the claim period to the settlers.

The settlers are also claiming exemplary damages as they contend that FELDA, as the statutory authority set up by law to look after the welfare of the settlers has instead exploited its position of power and authority over the settlers and committed fraud and breach of trust.

Released by:

Sivarasa Rasiah (Lead counsel for the settlers)