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Wednesday, 7 June 2017

FGV Showdown inevitable as CEO prepares to reveal all & If no swift action is taken with this information then we are in big trouble

As FGV showdown looms, CEO lays down ultimatum – it’s either him or Isa

image: http://www.thestar.com.my/~/media/online/2017/06/06/23/02/isa-zakaria-felda.ashx/?w=620&h=413&crop=1&hash=290C396F08A679BABC86BA75754D3D7054B339AE
 
KUALA LUMPUR: A showdown looms at Felda Global Ventures Holdings Bhd (FGV) with its group president and CEO Datuk Zakaria Arshad asking shareholders whether he or chairman Tan Sri Mohd Isa Abdul Samad should leave one of the world’s largest listed plantation companies.
“Under the circumstances, I cannot go on working in FGV. Shareholders have to decide .. either he (Isa) goes or I go,” he told StarBiz in a no-holds-barred interview just a few hours after receiving a letter telling him to go on leave pending an investigation related to a subsidiary company of FGV.
“How to work if he’s (Isa) still there?” asked Zakaria, who received the letter yesterday.
“The shareholders can choose either one, they can decide,” he said, adding that the letter did not state how long he has to be away from the office.
Zakaria urged the Malaysian Anti-Corruption Commission (MACC) to investigate allegations of improprieties in FGV and said he would like it to probe the parties behind contracts.
“On paper, everything is above board. I invite the MACC to investigate ... who’s behind all the deals, who are the people we’re giving contracts to, which companies and why only these companies get contracts,” he said.
Isa told a packed press conference here yesterday that the decision to ask Zakaria to go on a leave of absence was to enable FGV’s internal auditing team to further probe the purported wrongdoing involving several million ringgit from Delima Oil-Safitex business deals, including default in payment.
image: http://www.thestar.com.my/news/nation/2017/06/07/decision-in-hands-of-shareholders-as-fgv-showdown-looms-ceo-lays-down-ultimatum-its-either-him-or-i/~/media/399cd3fb9262476faef83078d32a0033.ashx?h=801&w=500

“This matter was highlighted to us based on the findings of four investigations by our external audit firm some time back,” said Isa, who declined to disclose the findings.
“No time frame has been set for this investigation, but we will issue a show-cause letter to Zakaria once it is completed,” he said, adding that Zakaria will then get an opportunity to defend himself.
Isa also maintained that the decision to suspend Zakaria was by the FGV board of directors and “not by him alone”.
The board’s decision came a day after Zakaria was told to resign by Isa following a series of board meetings since May 31, concerning delayed payments owed to Delima Oil by Safitex, an Afghan company with an array of businesses and headquartered in Dubai.
“The board was of the view that, if it is possible, he resign, so that it does not become a big issue ... but it does not mean we want to cover up,” said Isa.
On Zakaria urging the MACC to investigate the matter as well as other issues in FGV, Isa welcomed any move by the agency.
“We have nothing to hide.”
Zakaria said that since coming into FGV last April, he managed to turn the company around by cutting costs extensively. It cut RM130mil last year, resulting in the company showing a small profit in the latest quarterly results.
“It’s a profit compared with the RM81.1mil loss in the same period last year. It’s a turnaround and we are cutting costs more aggressively this year. I am on track to reach my profit numbers of about RM600mil for this year as promised under the turnaround plan,” he said.
Zakaria said he was not informed of the last three board meetings or given a chance to defend himself.
On his stint as CEO, Zakaria said there had been several occasions where he and the chairman did not agree on the manner in which the company should be managed.
Zakaria said it started when he picked an internal candidate as a head of plantations while the chairman had someone else in mind.
He added that he was overruled by the FGV board on at least two occasions involving investments into non-plantation-related areas.
One was an additional £100mil (RM550mil) into Felda Cambridge Nanosystems Ltd, a company producing nanocarbons, over the next three to four years.
Zakaria said the subsidiary had already lost RM117mil in the past three to four years.
He added that the board’s executive committee agreed to stop the investment but the board later decided to proceed.
Zakaria said he also did not agree with the proposal to invest RM300mil for a 30% stake in a factory located in Klang.
“Why do I want to put RM300mil in a non-core business?” he said.
“There are other examples, direct negotiations, direct contracts... I’ve been entrusted with managing the company well and when I enforce it, then this is what happens,” Zakaria said.
Zakaria said he had spoken to Felda chairman Tan Sri Shahrir Abdul Samad, who was supportive of the measures he instituted.

Read more at http://www.thestar.com.my/news/nation/2017/06/07/decision-in-hands-of-shareholders-as-fgv-showdown-looms-ceo-lays-down-ultimatum-its-either-him-or-i/#j82TpktGyhE2ls45.99

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