The Malaysian Reserve

FGV sees further changes at board level

Azhar says the internal forensics audit had involved the past and present FGV board members and management (Pic by Muhd Amin Naharul/TMR)

This marks a 2nd corporate structure shift at the world’s largest CPO producer in 2 weeks

By ALIFAH ZAINUDDIN / Pic By MUHD AMIN NAHARUL

FGV Holdings Bhd has appointed two new directors to its board committee amid plans to restore confidence in the troubled plantation firm.

The announcement on the local exchange yesterday marks a second corporate structure shift at the world’s largest crude palm oil (CPO) producer in two weeks, following the departure of three top executives at the end of August.

Former Bursa Malaysia Bhd CEO Datuk Yusli Mohamed Yusoff and Datin Hoi Lai Ping have been appointed to the board at FGV, while FGV director Datuk Yahaya Abdul Jabar has been redesignated as an independent non-ED from senior independent non-ED.

This brings the total number on FGV’s board to 14 directors. The company, however, did not give a rationale behind the new appointments.

FGV recently concluded investigations on several of its business practices following “adverse findings” from an earlier probe into its investments.

Chairman Datuk Azhar Abdul Hamid (picture) said the internal forensics audit had involved the past and present board members and management of the listed plantation company.

However, he declined to disclose the names of those involved and said the information will be made public pending approval from the company’s lawyers in two weeks.

In addition, Azhar said further changes are likely to occur at the board and management levels.

“The possibility is there. Under the Companies Act 2016, the highest level of responsibility for the company’s management is with the board.

“If the company is not managed properly or if things are not done in line with the existing policies, those things need to be reviewed and action needs to be taken. In fact, we are going through that painful pro- cess right now,” he said.

The probe into FGV’s investments, which began in January, is focused mainly on its RM1.1 billion acquisition of loss-making 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.

FGV had announced an immediate turnaround plan which is aimed at restoring operational integrity and improving its finances.

The company 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.

Its stock price has also taken a beating over the last five years due to disappointing financial results, corruption allegations, questionable deals and management uncertainties.

FGV shares currently hover at RM1.51, a steep 67% decline from its initial public offering of RM4.55 in 2012.