adduser, chown: /home2/xyz: Operation not permitted

[stanliao]

Dear All,

I use busybox/adduser to create a new user account. However, it prompts
error message "Operation not permitted". The user account is created under
an FAT32 partition. Options to mount this FAT32 partition are shown as the
followings:
/dev/sda/part1 on /home2 type msdos
(rw,noatime,nodiratime,uid=1000,gid=1000,fma
sk=0000,dmask=0000,codepage=cp437)

Command/operation to create a new user account is as follows:
# whoami
root
# id
uid=0(root) gid=0(root)
# adduser -h /home2/xyz xyz
adduser: /home2/xyz: Operation not permitted
Changing password for xyz
New password:
Retype password:
Password for xyz changed by root

And I found that owner and group of /home2/xyz is not xyz but another id
(the user who own id = 1000). Please note that uid for xyz is 1002. So, I
execute "chown" and get the error message:
# chown xyz /home2/xyz
chown: /home2/xyz: Operation not permitted

Excuse me, what else I missed in order to create this user account? What
operation is tried while I execute "adduser" and "chown" but is denied?

Thank you very much.
Stan Liao