Its chairman, however, declines to disclose the names of those involved
By ALIFAH ZAINUDDIN / Pic By MUHD AMIN NAHARUL
FGV Holdings Bhd’s (FGV) forensics audit into transaction irregularities involves past and present board members and management of the listed plantation company, said chairman Datuk Azhar Abdul Hamid.
He said the forensic audit probes various dubious deals including FGV’s acquisition of a loss-making palm plantation company, a UK-based graphene production company and investments in a condominium property.
Azhar, however, declined to disclose the names of those involved and said the information will be made public upon the finalisat ion of findings and recommendations made by the company’s lawyers.
“We have completed the investigation. But in any case, we have to be careful. We cannot simply name names.
“We must have the evidence and proof, and we must make sure that actions taken are appropriate. So, let’s not name anyone for the time being,” he told reporters at FGV’s special press conference in Kuala Lumpur yesterday.
The forensic audit is expected to be ready within the next couple of weeks.
Azhar also did not dismiss possible changes at the board and management levels at the world’s largest palm producer.
“There is always that possibility. Under the Companies Act 2016, the highest level of responsibility for the management of the company is with the board. If the company is not managed properly or if things are not done in line with existing policies, these things need to be reviewed and actions need to be taken.
“We are going through that painful process right now,” he said.
FGV’s investigation into its investments began in January this year and is focused mainly on its RM1.1 billion acquisition of Asian Plantations Ltd, FGV Cambridge Nanosystems Ltd and its purchase of luxury condominiums at The Troika in the Kuala Lumpur City Centre.
The forensic investigators had examined open credit lines, poor purchasing trading practices and poor palm oil sales, direct awards of procurement contracts that breach best practices, and the shortage of workers from mid-2016 to mid-2018 that resulted in financial losses over the period.
The firm had announced an immediate turnaround plan which aims to restore operational integrity.
Azhar did not provide a timeline for the completion of all the initiatives, but expects the plan to be in force throughout the remaining two years of his tenure.
“I don’t have much time. We don’t want to implement a hasty timel ine as we may need more time than required. We hope it won’t be too long. The faster we do this, the better,” he said.
FGV had recently declared a net loss of RM23.2 million for its second quarter ended June 30, 2018 (2Q18), versus a net profit of RM37.3 million made in 2Q17 on the poor performance of the plantation sector.
Revenue decreased by 18.4% year-on-year to RM3.44 billion on lower productivity and average crude palm oil price realised, higher production costs, and higher share of loss from joint ventures and associate companies.
For the quarter, the plantation sector suffered a loss of RM6.53 million, a steep decline from a profit of RM159.88 million in the previous corresponding quarter.
FGV manage s about 440,570ha of landbank in Malaysia and Indonesia. The company’s stock price has taken a beating over the last five years due to disappointing financial results, corruption allegations, questionable deals and management uncertainty.
It currently hovers at RM1.49, a steep 67% decline from its initial public offering of RM4.55 in 2012.