Lang
On 28 August 2025, FGV Holdings Bhd quietly disappeared from Bursa Malaysia at RM1.30 a share — a muted exit for a company that had once promised so much 13 years earlier. FGV Group Chief Executive Officer Fakhrunnaim Othman framed the move as a fresh start, saying: "The delisting strengthens our alignment with the Federal Land Development Authority (FELDA) and positions us to focus on sustainable growth and long-term value creation."
Prime Minister Datuk Seri Anwar Ibrahim described it as a return to the company's roots, saying: "Privatisation will allow FELDA to bring FGV back to its original purpose of prioritising settlers' interests." Its blockbuster listing on 28 June 2012 had been front-page news: the world's second-largest initial public offering (IPO) after Facebook, the biggest in Asia, and a source of national pride for Malaysia. Priced at RM4.55 a share, FGV raised RM10.4 billion. On its debut day, the stock jumped 20% to RM5.46 before closing at RM5.30, briefly giving the plantation giant a market capitalisation of nearly RM17 billion.
That debut appeared to confirm what fund managers had expected: a must-own index heavyweight, backed by FELDA, the government agency that had established FGV in 2007 as its commercial arm. With vast palm oil plantations, a global footprint and a workforce of 51,000, FGV looked like an unstoppable force. But the dream soon unravelled.
The IPO momentum did not last long. By 2017, its shares were trading at around RM1.70. Over the following two years, FGV posted heavy losses: RM1.08 billion in 2018 and RM246 million in 2019. The government's "White Paper" on FELDA, released in April 2019, stated that "FGV spent 73% of its IPO proceeds on investments and developments that were not profitable."
In other words, a large share of the capital raised was never channelled into productive projects. Its troubles were far from over — if anything, they were only beginning. Operational weaknesses compounded the problems, as FGV suffered from declining yields, rising costs and repeated asset write-downs. Major acquisitions ended badly on its books. In 2014, FGV bought Asian Plantations Ltd for RM628 million, only to later write off more than RM500 million and sue 14 former directors for breach of fiduciary duty. The following year, a plan to buy a 37% stake in Indonesia's PT Eagle High Plantation Tbk was abandoned after a public backlash over pricing. Governance issues further eroded confidence. In 2017, then-CEO Datuk Zakaria Arshad was suspended by the board, sparking a public rift with then-chairman Tan Sri Mohd Isa Abdul Samad. Although Zakaria was later reinstated, he resigned in 2018 amid continued disputes. By that point, some institutional investors had already decided to cut their losses — a major setback for any listed company.
The Employees Provident Fund (EPF), one of the largest local institutional investors, confirmed in 2016 that it had sold off its entire stake. Financial performance continued to weaken. By 2018, FGV had recorded annual losses of nearly RM1 billion due to asset impairments and falling palm oil prices. At the same time, regulators overseas began scrutinising its labour practices. On 30 September 2020, the US Customs and Border Protection (CBP) agency issued a Withhold Release Order, detaining FGV's palm oil products over forced labour findings. Bloomberg later described FGV as a "money-losing, debt-laden agribusiness with anaemic growth and controversial plantation acquisitions," calling its trajectory "deeply embarrassing" for the Malaysian market.
Against this backdrop, FELDA launched a mandatory takeover offer in December 2020 at RM1.30 a share. By early 2021, it had raised its stake to about 80%, but fell short of the 90% threshold required for a compulsory buyout. At the time, Devanesan Evanson, chief executive of the Minority Shareholders Watch Group, described the offer as fair.
A market observer told The Malaysian Reserve (TMR) that minority shareholders "had no real choice, because the stock's performance had been poor since the IPO. If they didn't accept, there was no guarantee when another offer would come." Nonetheless, trading liquidity dried up as FELDA's control grew, and Bursa Malaysia granted temporary exemptions from public shareholding spread requirements. In May 2025, FELDA relaunched its offer at the same price. In a research note that month, MIDF Research said the RM1.30 offer represented a 12% premium over its fair value estimate of RM1.16, and urged shareholders to accept it. BIMB Securities Sdn Bhd noted in a May report: "Full ownership of FGV could allow FELDA to streamline operational decision-making, accelerate group-wide transformation efforts, and achieve better alignment between upstream and downstream activities as part of its broader transformation agenda." The report added: "In addition, FELDA has introduced initiatives such as the Settlers Development Programme (SDP), aimed at reducing dependence on traditional commodities like palm oil and rubber while promoting income diversification among settlers. Full control of FGV could support FELDA's ambition to modernise its agricultural ecosystem, strengthen self-sufficiency, and drive rural socio-economic development." By 29 July, FELDA had raised its stake to 91.73%, crossing the compulsory acquisition threshold. FGV subsequently applied for delisting on 15 August, trading in its shares was suspended on 25 August, and it was removed from the Main Market on 28 August.
The buyout was financed with state support. FELDA secured more than RM6 billion in government-guaranteed loans to fund the acquisition, underscoring the extent of public-sector intervention required to bring FGV back under its wing. This intervention highlighted just how closely FGV remained tied to public policy priorities despite being a listed entity.
Overall, FGV's market capitalisation shrank from about RM17 billion in 2012 to roughly RM4.7 billion at delisting. In effect, more than RM12 billion in value evaporated over its years on the exchange, making it one of the costliest reversals of a government-linked IPO in recent memory. Individual settlers who held onto their shares saw dividends fall short of expectations, while institutional investors such as Tabung Haji recorded significant paper losses.
In research notes, analysts said FGV's delisting removes one of the world's largest palm oil producers from the exchange, though the near-term commercial impact is limited given its low free float. The bigger impact concerns reputation. The findings of the White Paper on the misuse of IPO proceeds are expected to shape investor scrutiny of future government-linked listings. At the same time, the US import ban showed how environmental, social and governance (ESG) risks can cut off market access overnight.
Loui Loh Lee Yee, head of research at Malacca Securities Sdn Bhd, said: "FGV's delisting reduces the number of pure-play plantation giants on the Malaysian exchange, consolidating the sector's representation around its remaining large peers." He added that investors were likely to redirect funds towards other listed plantation companies such as SD Guthrie Bhd and IOI Corp Bhd, but that the overall impact would remain limited since Bursa Malaysia is a diversified exchange with many opportunities outside the plantation sector.
On future IPOs, he said: "I don't think they will be affected much, as pricing will depend on each company's individual earnings, revenue and efficiency in extracting palm oil." Meanwhile, a market observer said FELDA now has greater room to restructure the company. "They have a better chance of carrying out the transformation because there are things you can clean up as a private entity that you can't do as a listed company. It had been trading below its true value for far too long, so privatisation allows them to hit reset." Even so, the scars on the market remain visible. IPO activity in Malaysia slowed sharply in the years following 2012, and FGV's decline is often cited as a cautionary tale of what can happen when governance lapses and poor investment choices erode investor confidence. Going forward, regulators and investors are expected to demand clearer disclosures on the use of proceeds and stronger ESG compliance from government-linked listings, to avoid a repeat of the FGV experience.
Still, FGV's delisting closes one of the most prominent chapters in Malaysian corporate history — from a blockbuster debut, through years of decline, to an eventual return to state ownership. For investors, the episode is a reminder that size and government backing are no guarantee of returns, while for FELDA, the task now is to prove that taking the group back into private hands can deliver the transformation that eluded it as a listed company.
Source: The Malaysian Reserve