07
Jun
17

FGV must explain ‘ridiculous deals’ allegation by CEO

FGV must explain ‘ridiculous deals’ allegation by CEO

Failure of FGVH chairman Isa Samad to explain scandalous allegations will expose himself to same violation under which the president-CEO was suspended.COMMENT

By Tony Pua

The Board of Directors of Felda Global Ventures Holdings (FGVH) has suspended both the chief executive officer (CEO) Zakaria Arshad and the chief financial officer (CFO) Ahmad Tilfi Mohd Talha pending internal audit investigations over 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 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 with the perpetrators never getting 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, he said, were plans for a £100 million (RM551 million) expansion of Felda Cambridge Nanosystems Ltd, a nano carbon company, which 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. To me this is ridiculous, we’re a plantation company,” he was quoted as saying by The Star.

Another investment, Zakaria said, was the plan to spend RM300 million to acquire a 30% 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.

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

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

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

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

…more
FGV must explain ‘ridiculous deals’ allegation by CEO
June 7, 2017 – FMT

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All that is necessary
for the triumph of evil
is for good men
to do nothing.

- Edmund Burke
When the people
fears their government,
there is TYRANNY;
when the government
fears the people,
there is LIBERTY.

- Thomas Jefferson
Do you hear the people sing?

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