Govt steps in to contain FGVH mess

By ALIFAH ZAINUDDIN

The government has appointed an outside counsel to wade through the facts and allegations swirling around Felda Global Ventures Holdings Bhd (FGVH) following the suspension of its CEO on Tuesday.

Former Cabinet Minister Datuk Seri Idris Jala was tapped yesterday as special counsel to “establish the facts of the case” and “recommend the way forward” to settle counterclaims of graft and abuse between the FGVH board and CEO Datuk Zakaria Arshad.

Idris’ appointment as independent counsel was agreed by FGVH majority shareholder Federal Land Development Authority (Felda), FGVH chairman Tan Sri Mohd Isa Abdul Samad, Zakaria and FGVH CFO Ahmad Tifli Mohd Talha.

Zakaria, Ahmad Tifli and two other FGVH officials were put on forced leave on Tuesday, on orders of the board pending investigation into a contract that was deemed improper. FGVH is currently conducting internal investigations on “improprieties” identified by external auditor PricewaterhouseCoopers Malaysia (PwC Malaysia).

However, Zakaria has also come forward to allege misconduct and abuse of power within the oil palm conglomerate that was rated the largest in the world when it was listed in 2012.

The appointment of Idris is seen as a bid by the government to quieten the very public claims and counterclaims of impropriety between FGVH and Zakaria.

The case against Zakaria revolves around a non-payment of a bill to Dubai-based Safitex Trading LLC for palm oil destined for Afghanistan.

In a statement yesterday, FGVH said the outstanding debts of Safitex to its subsidiary, Delima Oil Products Sdn Bhd, have increased to US$11.7 million (RM49.9 million) from US$8.3 million recorded last year, exceeding the allocated credit limit per PwC Malaysia’s statutory financial audit for the financial year ended Dec 31, 2016.

Apart from Zakaria and Ahmad Tifli, Delima Oil GM Ahmad Salman Omar and FGV Trading Sdn Bhd CEO Kamarzaman Abd Karim were also suspended.

Following his suspension yesterday, Zakaria told reporters that he has had problems with the board and several of his decisions over investments were overruled.

He had also invited the Malaysian Anti-Corruption Commission (MACC) to investigate FGVH.

With the internal probe underway and a further inquiry by the MACC expected, Felda chairman Tan Sri Shahrir Abdul Samad has asked both Zakaria and Mohd Isa to put an end to their public row.

“I hope the inquiry against Zakaria will be quick and fair. As chairman of Felda, I would like to see the inquiry process being done promptly and fairly because it involves four senior officials who were forced to leave,” Shahrir said.

Shahrir said he has also requested FGVH to grant Felda several places on the company’s board to restore confidence in the firm.

“Felda’s board of directors have met and we want three representatives from Felda to sit on the board of FGVH for confidence to be restored swiftly. If there are no Felda representatives on the board, the public will perceive Felda as having no interest in FGVH,” he added.

The boardroom drama has caught minority shareholders by surprise and may have indicated simmering problems within the troubled plantation group.

Malaysian Institute of Corporate Governance president Tan Sri Megat Najmuddin Megat Khas said investigations by the MACC may help bring out the truth.

Megat Najmuddin said FGVH’s latest issue has raised plenty of questions on the palm oil corporation’s ways of doing business which must be addressed.

“At the moment, we are not privy to all the internal goings-on. We are basically listening to two sides and it is clear that there is a lot of animosity and bad face between those two.

“It is not nice (that this is happening) because things will be blown out of proportion and a lot of incongruities will be made public,” Megat Najmuddin told The Malaysian Reserve.

He said the sudden notice given to Zakaria gave the negative impression that FGVH was “scapegoating” to conceal an internal blunder.

“This looks like scapegoating. I’m glad that the MACC is going into the company to investigate whether there were any crimes or grafts committed. Only then will we know and get the true picture.

“I have heard rumours of all kinds of things happening there and I’m not very happy about it. A lot of people are not happy about it,” said Megat Najmuddin, who previously served as an advisory board member of the MACC.

MACC deputy chief commissioner Datuk Azam Baki told Reuters that the agency will hold an investigation into FGVH as soon as possible, with Zakaria being sought to assist in the probe.

Azam said MACC will look into claims of graft and possible abuse of power involving “several officials”, but declined to name the officers or give details on the assertions.

Yesterday, Zakaria arrived alone at the MACC headquarters in Putrajaya to submit documents on FGVH. The 57-year-old said he will cooperate with the authorities and provide information on business-related matters, including on allegations linked to Safitex.