The planter is ‘sorting out the issue’, but there is no immediate plan for holding an EGM

by TMR / pic by TMR FILE

FGV Holdings Bhd is not expected to call for an EGM anytime soon to resolve the directors’ fee impasse after shareholders, including the Federal Land Development Authority (Felda), rejected resolutions related to remunerations of the board members.

A source close to the development said the planter is keen to seek solutions to end the directors’ salary saga and ensure the continuity of the company’s turnaround plan.

The source said FGV is “sorting out the issue” but there is no immediate plan for holding an EGM.

“No plans for an EGM for now,” the source told The Malaysian Reserve (TMR).

None of the directors of FGV has resigned after three shareholders — Felda, Lembaga Tabung Angkatan Tentera (LTAT) and Koperasi Permodalan Felda Malaysia Bhd (KPF) — rejected resolutions related to fee payments to directors at the company’s AGM. It is also not known if they are working for free.

Felda owns about a 33.6% stake in FGV, KPF (5%) and LTAT (1.25%). It is not known if the directors are paid for their current work after the rejection of the resolutions.

A check on the shares polling results of the AGM showed that shareholders holding 66.4% or 1.37 billion shares from the total of 2.135 billion shares, voted against resolutions 1, 2 and 3. All these resolutions were related to directors’ fees and benefits. FGV’s total shares issued are 3.65 billion.

The figures released, however, did not state who were the shareholders who voted against the resolutions. Many shareholders have not come out to state their voting swing, except LTAT.

Earlier this week, Deputy Economic Affairs Minister Dr Mohd Radzi Md Jidin said the decision to reject the three resolutions was made following the company’s poor performance, after having incurred RM1.08 billion in losses last year.

He said the Felda board of directors reviewed the resolutions and agreed to reject all resolutions, involving payment of fees and benefits to the FGV board members.

“The board of directors was also of the view that its chairman’s fees and benefits were among the highest compared to other plantation listed companies.

“Moving forward, Felda and FGV will continue to hold discussions and have engagement sessions to resolve the matter soon. The government is confident that the problem will be resolved amicably to the satisfaction of both parties,” he said during an oral question-andanswer session at Dewan Negara on Monday.

LTAT in a statement said it voted against FGV’s directors’ fees to protect the interests of its contributors who are members of the Armed Forces.

“The decision was premised on the fact that LTAT strongly believes in shareholder activism, particularly to protect the interests of our contributors — members of the Armed Forces.

“Given prevailing economic conditions and FGV’s current financial standing, we are of the view that director’s remuneration should be commensurate with the current state of affairs at FGV and its prospects ahead,” LTAT had said in a statement.

The shareholders rejection was a fresh blow to the palm oil giant and its new management.

The board is led by chairman Datuk Wira Azhar Abdul Hamid. The rejection also underlined the undercurrent between FGV and Felda over the land lease agreement (LLA) and worries of its termination.

Under its current terms, FGV must pay a fixed lease payment of RM250 million per year for 99 years, irrespective of prevailing crude palm oil prices.

FGV has a total landbank of 439,725ha and about 351,000ha is leased from Felda under the LLA.

Meanwhile, industry observers viewed that the dynamic inside FGV is likely to have changed since the appointment of new Felda chairman Tan Sri Mohd Bakke Salleh.

Mohd Bakke was appointed as the acting president and group CEO of Sime Darby Bhd in 2010, in place of Azhar, who was subsequently re-designated as a special advisor to the acting president and group CEO.

Some quarters in the industry viewed that Mohd Bakke may inject a different outlook on the LLA which will determine the discussions moving forward. — TMR