Call for EGM to resolve FGVH turmoil

by ALIFAH ZAINUDDIN

FELDA Global Ventures Holdings Bhd (FGVH) shareholders can call for an EGM to seek clarification over claims of irregularities and leadership turmoil haunting the firm.

Tension at one of the world’s largest crude palm oil (CPO) producers heightened yesterday, when officers from the Malaysian Anti-Corruption Commission (MACC) visited Menara Felda.

The leadership crisis boiled to new levels after FGVH chairman Tan Sri Mohd Isa Abdul Samad and the board instructed CEO Datuk Zakaria Arshad and three other executives to go on leave over transaction irregularities.

Zakaria denied the allegations and made a report at the MACC on Wednesday, a day after he was asked to go on leave.

Shareholders can call for an EGM and they can take whatever action they deem fit, says Megat Najmuddin. (TMRpic)

Malaysian Institute of Corporate Governance president Tan Sri Megat Najmuddin Megat Khas said a 10% quotient was sufficient for minority shareholders to demand for an EGM and put forth a resolution.

“For the company, the ultimate authority lies in the shareholders. They can call for an EGM and they can take whatever action they deem fit — seek clarification, remove the chairman or board of directors — because the board is fundamentally accountable,” he told The Malaysian Reserve.

Under the Companies Act 1965, shareholders have the right to requisite and convene a general meeting with two or more members holding not less than 10% of the issued share capital.

As at April 28, 2017, FGVH shareholders comprise the Federal Land Development Authority (Felda) (21.25%), Felda Asset Holdings Co Sdn Bhd (12.42%), Lembaga Tabung Haji (7.8%), Retirement Fund Inc (7.37%), Koperasi Permodalan Felda Malaysia Bhd (5.5%) and the Pahang state government (5%).

Malaysian investors held 89.1% of the shares, while foreign investors made up the remaining 10.9%.

Thousands of FGVH’s small-time shareholders are Felda settlers who were given the option to subscribe to the share of the firm during its initial public offering (IPO).

FGVH’s successful listing as the world’s second-largest IPO in 2012 was short-lived as CPO prices plunged and the company’s share price fell to a low of RM1.19 three years later. Trust in Felda’s commercial arm has since waned, as many settlers claim they are now in debt due to the losses incurred.

The war of words between the FGVH board and Zakaria had rattled investors who dumped the shares on Tuesday, following the announcement of the CEO’s suspension.

The removal of Zakaria, along with three other senior officials, were grounded on pending investigations into a non-payment bill that involved Dubai-based Safitex Trading LLC for Afghanistan-bound palm oil.

FGVH said the outstanding debts of Safitex to its subsidiary, Delima Oil Products Sdn Bhd, have snowballed to US$11.7 million (RM49.9 million), exceeding the allocated credited limit per auditor PricewaterhouseCoopers Malaysia’s statutory financial audit for the year ended Dec 31, 2017.

Meanwhile, according to Bernama, 20 officers and men arrived at Menara Felda at 10am yesterday and went straight up to Level 45 where the FGVH headquarters are located.

The MACC collected documents related to the investigation from Zakaria’s office and were there until 3pm.

Another four MACC officers arrived at the office at 1.30pm, one of them seen carrying a document bag.

Former Minister Datuk Seri Idris Jala, who was appointed as an independent counsel to “establish the facts of the case”, said it was “premature” to make statements at the moment.

“Currently, I am totally focused on the work at hand to establish the relevant facts of the case. While I understand both the media and public’s interest for further details, it is premature for me to make any statements at this juncture,” he said in a statement.

However, Megat Najmuddin said Idris’ role in FGVH must be clearly defined and identified as the firm is a listed entity.

“I would like to know what his terms of reference. It is not made clear,” Megat Najmuddin said.