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Isa Samad must explain the 'ridiculous deals' of FGV Holdings

MP SPEAKS | The Board of Directors of Felda Global Ventures Holdings (FGVH) has suspended both its chief executive officer (CEO) Zakaria Arshad and chief financial officer (CFO) Ahmad Tilfi Mohd Talha pending internal audit investigations into purported irregularities in payments made by a subsidiary company.

Until such a time where there is greater clarity on what the purported irregularities are, Malaysians can give the FGVH board of directors the initial benefit of the doubt as we are sick of hearing cases of misappropriation and corruption in government-linked companies (GLCs) - which never get investigated or the perpetrators are never prosecuted.

However, what is most shocking is the revelation by the suspended CEO that he was being punished for attempting to block “ridiculous deals” from being approved by the board of directors.

Among the investments, Zakaria (photo) said, was a plan for a 100 million pounds sterling (RM551 million) expansion of Felda Cambridge Nanosystems Ltd, a nano carbon company that had already lost RM117 million in the last three to four years.

"Now, they (the FGV board) want to expand, they need another 100 million pounds. To me this is ridiculous, we're a plantation company," Zakaria was quoted as saying by The Star.

Another investment, Zakaria said, was the plan to spend RM300 million to acquire a 30 percent stake in a creamer factory, owned by a company primarily involved in making cans.

"Why do I want to put RM300 million for a non-core business? They also overruled, even though exco already said no-go but the investment was given the go-ahead," he said.

Direct interference by the FGVH board

More frighteningly, Zakaria also revealed direct interference by the FGVH board to award directly-negotiated contracts without tender, which he had wanted to stamp out since he was appointed as CEO just over a year ago, in April 2016.

These are shocking revelations which, to a certain extent, explain how this purportedly largest plantation company in the world saw its profits plunge dramatically from RM982 million in 2013 to RM325 million, RM182 million and RM31 million respectively in 2014, 2015 and 2016.

The above doesn’t yet take into account the botched US$680 million (RM2.9 billion) acquisition of a 37 percent stake in Eagle High Plantations at an astronomical price that FGVH could in no way afford.

Based on the latest financial statement, of March 2017, FGVH has only RM1.8 billion in cash left while it has to service loans and borrowings exceeding RM4 billion.

FGVH chairperson Mohd Isa Samad must immediately confirm if what Zakaria said is true and provide the valid reasons why the board of directors is making executive decisions that overruled the company’s top management team and executive committee.

The failure of the FGVH non-executive chairperson to explain the above scandalous allegations will expose himself to the “violation of corporate governance code”, the very wrongdoing which the FGVH CEO and CFO are purported guilty of.

TONY PUA is DAP national publicity secretary and Petaling Jaya Utara MP. He blogs as well.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

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