by FARA AISYAH / pic by ISMAIL CHE RUS
FGV Holdings Bhd will appoint a new group CEO in “the next few days” as the struggling planter seeks to correct its operational and financial debacle.
Chairman Datuk Wira Azhar Abdul Hamid (picture), in a compelling and comprehensive letter to plead his case with shareholders, said the leadership vacuum at the company needs to be filled urgently.
“We have appointed a new group CFO, a new chief procurement officer, a new COO of the plantation operations and a new chief human resource officer.
“The last appointment will be for a new group CEO, which we hope to announce in the next few days,” he said in the 2,811-word letter.
The letter was published on Bursa Malaysia in a filing yesterday.
The announcement confirmed The Malaysian Reserve’s report last week that the new CEO would be announced as early as this week.
The chairman added that the new team will implement the transformation plan that the board has been working on and will have the task of turning the company around, led by their board of directors.
With this professional team in place, Azhar said FGV will be able to make the changes that need to be made, make the tough decisions to cut waste and trim the fat, and start sweating its assets as they ought to be.
Azhar also said that over the next two to three months, the new group CEO and his management team will execute the plan and announce details when appropriate.
The chairman also listed a slew of flaws and questionable management and operation decisions that had battered the world’s second-largest initial public offering (IPO) in 2012.
He said FGV’s operations were not effectively and efficiently managed, as evidenced by its persistent poor performance.
Furthermore, there are operational leakages and inefficiencies in the system that run into millions of ringgit a year, which has contributed to the firm’s poor financial performance.
“Several initiatives are being implemented including a group-wide review of procurement policies and practices. We are also reviewing our capital structure and financing costs. Additionally, the group is looking at rightsizing our manpower requirements.
“It is estimated that FGV will be able to save at least RM150 million in 2019 from plugging leaks and addressing inefficiencies,” he said.
Azhar admitted that as a listed company, FGV’s top priority must be its shareholders. Unfortunately, he said, current internal organisational structures do not always optimise benefit to shareholders.
These are being rectified to maximise shareholder value.
He also said there are certain joint ventures that have not brought optimal benefits to the company — these are also being reviewed and announcements will be made as required.
“FGV has identified several non-core businesses and assets with an estimated value of RM350 million for disposal. Announcements will be made at the appropriate time.
“FGV has also identified several areas for the development of strategic alliances or partnerships to capitalise on our strengths and plug capacity gaps where there are any,” he added.
Azhar also said after consecutive quarters of dismal and declining performance, it is clear that a culture change in FGV is long overdue.
Furthermore, the leadership struggle of 2017, followed by the measures taken to address leadership challenges in 2018, have left many employees feeling displaced and uncertain.
In concluding the letter, Azhar said: “As chairman of FGV, I have laid bare all the facts that I am able to disclose to you today. This is a practice I plan to continue as long as I am chairman because transparency and timely and full disclosure are particularly important when trust has been eroded.”
“With the information in this letter, you can now judge us over the next several months. You can decide if we are doing right by you and the company we all call ours. And you can decide if we deserve to win your trust back,” he concluded.