FGVH issues show-cause letters

By ALIFAH ZAINUDDIN

Felda Global Ventures Holdings Bhd (FGVH) has given a deadline for CEO Datuk Zakaria Arshad and CFO Ahmad Tifli Mohd Talha to defend themselves against allegations of a corporate code violation.

In an exchange filing yesterday, the plantation firm noted it had issued and served the show-cause letters on Zakaria and Ahmad Tifli relating to the outstanding debt between Dubai-based Safitex Trading LLC and its subsidiary, Delima Oil Products Sdn Bhd.

The company said both officials have been given seven days from June 13 to provide a written reply pertaining to allegations mentioned in the letters and will continue to be on leave of absence until further notice from the board.

Last Tuesday, FGVH chairman Tan Sri Mohd Isa Abdul Samad and the board had ordered Zakaria, Ahmad Tifli and two other FGVH senior executives to go on leave, following an internal probe over “improprieties” identified by external auditor PricewaterhouseCoopers Malaysia.

The irregularities revolve around non-payment of a bill to Safitex for Afghanistan-bound palm oil, which FGVH claimed has increased to US$11.7 million (RM49.9 million) from US$8.3 million recorded last year.

In his defence, Zakaria said the board made “ridiculous” investment requests, including a £100 million (RM551 million) expansion in FGV Cambridge Nanosystems Ltd and a RM300 million investment to acquire a 30% stake in a creamer factory.

FGVH has since denied the claims, stating that none of Zakaria’s allegations were true.

In addition to the ongoing internal investigation, the Malaysian Anti-Corruption Commission (MACC) has also initiated a query on claims of graft and corruption at the palm oil company.

The MACC visited Menara Felda last Thursday, seizing boxes of documents after a five-hour raid. The agency said it will call and interview witnesses, including the company’s top management, to assist with the investigation.

The management crisis at FGVH knocked its shares to a six-month low of RM1.62 following the announcement. However, it has since showed some signs of recovery to close 4.22%, or seven sen higher, yesterday at RM1.73 — much to the delight of bottom-fishing investors.

The recovery in shares was a positive note to the company, which saw its market capitalisation improve to RM6.28 billion. However, RM1.73 remains a far cry from its institutional price offer of RM4.55.