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NEWS ADMIN

Mahamad Rodzi Abdul Ghani

DATE

14/01/2003

NEWS PROVIDER

Mahamad Rodzi Abdul Ghani

NEWS SOURCE

NULL

CATEGORY

HEADLINE

Malaysian landowners sue Unilever over sale of Pam
KUALA LUMPUR -(Dow Jones)- A group of landowners from east Malaysia'sSabah state are suing Unilever PLC (U.ULV) for a share of the proceedsfrom the sale of its wholly-owned Pamol Group to Malaysian oleochemicalscompany Palmco Holdings Bhd. (P.PAL).The 180.3-million-ringgit ($1=MYR3.80) claim is based on a joint ventureagreement between the landowners and Pamol which the landowners say wouldhave resulted in them owning 30% of Pamol had the venture been finalized.But the suit, filed Dec. 4 in the Johor Bahru Civil High Court after thelandowners said attempts to reach a settlement with Unilever and Pamolfailed, is unlikely to derail Pamol's sale to Palmco."What my clients want is compensation" and not to stop the sale, OswaldMojingol, a lawyer and spokesman for the 2,382 landowners, told Dow JonesNewswires.Pamol declined comment on the case, referring queries to its Unileverparent.A Unilever spokesman said: "This is an extremely complex issue. We areunable to make any comment at this juncture. The whole matter is governedby Malaysian law and we'll be seeking local legal advice on theappropriate next steps."Palmco officials couldn't be reached for comment.Unilever on Dec. 2 signed an agreement to sell its wholly-owned PamolGroup - which comprises 23,045 hectares of oil palm plantations and twopalm-oil mills - to Palmco for MYR567 million.The landowners who filed the claim are from tribes indigenous to Sabah,and are represented as plaintiffs in the suit by six businessmen.According to claim documents reviewed by Dow Jones Newswires, thelandowners were first invited to participate in a joint venture with Pamolaround 1995."Had it (the joint venture) materialized, what would have happened is thatmy clients would have had the 30% (of Pamol)," Mojingol said.Unilever and Pamol declared on June 30, 1999, that the joint-ventureagreement "had lapsed" because certain conditions were not met by April 9,1999, according to the claim documents.One of the terms of the agreement required the landowners to secure atleast 20,000 acres of good-quality land for the joint venture within sixmonths from Jan. 17, 1997. The deadline was later extended to April 9,1999.The landowners didn't meet that second deadline.But in their claim, they allege subsequent events and correspondence withUnilever and Pamol officials indicated the deadline had been extendedfurther.In their claim, the landowners are seeking an injunction to restrainUnilever from disposing of the proceeds of the Pamol sale up to the sum ofMYR180.3 million.That sum comprises MYR43.5 million in special damages for costs incurredin the land acquisition exercise and in professional fees and generaldamages of MYR136.9 million.