TSS and the 43.5m shares he owns in Premium Nutrients BHD

Tan Sri Somasundram (TSS) owns 43.5m shares in Premium Nutrients BHD. He is the 2nd largest holder after NLFCS. At the current share price (close of Friday the 08/05/08 it was 0.175 sen), that is worth RM7.6m. The initial IPO (through a reverse takeover of Bridgecon and an offer of shares) was at 0.50 sen. The company had been trying to list for some time and I believe the reverse IPO was the last grasp as I know it failed to be able to list on its own merits. A number of its shareholders have also been looking for at exit for some time and the company shareholder was substantially different within 2 months of its listing.

At the time of the IPO, TSS owned 36m shares which at the IPO price of 0.50 sens would be worth approximately RM18m. He recently purchased 6m shares (on the 26/06/07). The market price at that time was 0.24sen, (so he would have shelved out RM1.4m). Where does a Chairman of a co-operative amass such wealth? Tun Sambanthan when he founded Premium Nutrients had a symbolic 1 share, compare that to TSS's 43,500,000 shares.

I know a lot of NLFCS members are grateful to TSS for some largess he has done a decade ago but that is exactly the mindset that needs to be broken. They are members of a co-operative and the co-operative works for them. They don't need handouts from a chairman they elected in the first place! The fact is NLFCS should have done better and much more. Thinking about where it could have gone breaks my heart. It is simply an organisation without direction. Compared to its competitors, Mewaholeo, Pasir Gudang Edible Oils and even IOI, where is Premium Nutrients and NLFCS?

The boards of both Premium Nutrients and NLFCS as far as I can gauge are a board of yes men dependent on their position on TSS. I remember when board members used to ask questions, the then Managing Director and Chairman would confer in whispers before answering! So much for corporate governance!

The chairman has put people loyal to him (and his family members) in key positions and they in turn depend on his support to maintain their positions. He has been the chairman of NLFCS for more than 2 decades. He is 77 years old.

Like all organisations that have had the same leader for so long, the organisation has become his personal fiefdom. All opposition has been crushed and driven out and an unhealthy feudal culture is dominant. With his family members also in the organisation, the fact is that he can no longer be said to be acting in the interest of NLFCS members but in making sure that any successor is pliant and continues to protect his interest.

This is no longer a co-operative for the benefit of its members, again I reiterate, NLFCS and Premium Nutrients could have been so much more, but till date no one is held accountable for its malaise and a few people have gotten rich.

Premium Nutrients shares has been on a one way slide since it listed and is now less than half its IPO value. This after the KLSE has been rising the last few years. Why is no one held accountable and why are all the same actors still there? Isn't anyone responsible for anything in both the NLFCS and in Premium Nutrients?

The premium seems to be on loyalty rather than performance. As long as you don't oppose the chairman's wishes you can be as incompetent as you want.

The buck has to start with the chairman.....