Malaysiakini KiniGuide

All you need to know about the FGV crisis

KiniGuide  |  Published:  |  Modified:

KINIGUIDE | The crisis involving Felda Global Ventures Holdings Bhd (FGV) started after its group president and chief executive officer Zakaria Arshad was told to take an immediate leave of absence early this week.

In a filing to Bursa Malaysia, FGV - the world’s third largest oil palm plantation operator - stated that the leave of absence was pending an investigation of certain transactions by FGV’s subsidiary, Delima Oil Products Sdn Bhd.

Apart from Zakaria, FGV chief finance officer Ahmad Tifli Mohd Talha, FGV Trading chief executive officer Ahmad Salman Omar and Delima senior general manager Kamarzaman Abd Karim were also suspended.

FGV chairperson Isa Abdul Samad at a press conference on Tuesday confirmed that an internal audit would be conducted into the matter. He stressed that the decision to suspend Zakaria was made by the FGV board and not by him alone.

However, Isa threatened to sue a journalist for asking him to respond to allegations of abuse of power. The journalist had sought his comment on an article by blogger Raja Petra Kamarudin, who alleged that Isa wanted Zakaria removed in an attempt to cover up alleged corrupt practices in FGV.

That could just be speculation, but based on what that has been reported, Zakaria was purportedly suspended after he reportedly refused Isa’s request that he resigns over alleged wrongdoing in the credit arrangements between Delima Oil Products and Dubai-based Safitex Trading LLC.

Safitex reportedly has an outstanding debt of US$8.3 million (RM35.38 million at current rates) and had not made any repayment since the end of 2015.

However, Zakaria, in a letter to Isa, denied he had violated the corporate code of governance.

In the letter dated June 5, Zakaria argued that the paying process and the credit conditions used by Delima were already in place before he became the chief executive officer.

He was also reported by The Star on Tuesday as saying that he had tried to stop hundreds of millions of ringgit in investments by the company's board, which he described as “ridiculous”.

These reportedly include a £100 million ((RM551 million) expansion plan for the loss-making Felda Cambridge Nanosystems Ltd and a RM300 million plan to acquire a 30 percent stake in a creamer factory. Zakaria had pointed out these were non-core businesses of FGV.

Armed with a stack of documents, Zakaria the next day went to the Malaysian Anti-Corruption Commission (MACC), telling reporters that he was there to assist in investigations into allegations concerning mismanagement in the company.

Responding to Umno supreme council member Mohd Puad Zakarshi's call for both him and Isa to resign over the current crisis, Zakaria stressed that he would not do so as he had “done no wrong”. Isa, too, dismissed calls for him to resign, also claiming that he did no wrong.

Putrajaya has since announced the appointment of former minister Idris Jala as an “independent party” to look into the decision to suspend the FGV officials.

As part of the investigation into FGV, the MACC on Thursday raided Felda’s headquarters in Kuala Lumpur. Scores of officers seized four boxes and three trolley bags of documents from FGV following the eight-hour raid.

Who is Zakaria?

This 57-year-old, who has been thrust into the limelight after his suspension, is a second-generation Felda settler. Zakaria is a son of a settler from Felda Palong 1, Negeri Sembilan.

The father-of-four graduated with a Bachelor of Social Science (Economics) degree from Universiti Sains Malaysia.

Since then, Zakaria has spent the last 33 years in Felda, working in various companies under the group...

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