He said the move by the Federal Land and Development Authority, or Felda, to buy a 37% stake in the Indonesia company, EHP, which is listed on the Jakarta Stock Exchange, could spark concerns in the business community if it was not at the right price.

He said a report on the purchase of an overseas entity by Felda earlier that was done at a high price, was questioned by the corporate community.

Felda is buying into EHP, which stands for PT Eagle High Plantations Tbk, through a subsidiary, FIC Properties Sdn Bhd.

Earlier today, FMT reported that Wan Saiful Wan Jan, who heads the Institute for Democracy and Economic Affairs (Ideas), also questioned Felda’s decision to buy into EHP at what he described as a high price.

“It is mysterious to me how better shareholder value will be created when it looks like Felda is paying a very high price for Eagle High’s shares.

“Felda has to answer why they agreed to this high premium. There is already a lot of questions about the deal and this premium adds to the negative speculation about it,” he said in a statement today.

Felda in a statement yesterday confirmed that FICP has signed a sales and purchase agreement with Rajawali Group to buy a stake in EHP for US$505.4 million (RM2.26 billion), which provides access to more than 320,000ha of plantation land in Indonesia.

Further details on the acquisition were not disclosed by Felda as the agreement is subject to approvals of the relevant authorities in Malaysia and Indonesia.

Last year, Felda Global Ventures Holdings Bhd signed a different agreement to acquire a 37% stake in EHP for US$680 million (RM2.8 billion) in cash and stocks, but the agreement was terminated.