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Be answerable to shareholders

  • Any shift in FGV's business performance and investment directions will affect Felda, which boasts a multitude of settlers to whom FGV needs to answer.

Sin Chew Daily

Felda Global Ventures Holding Bhd (FGV) president and CEO Zakaria Arshad has been asked to go on leave pending investigation over the alleged involvement of FGV subsidiary Delima Oil Products Sdn Bhd in an inappropriate deal with Afghan company Safitex Trading LLC.

However, Zakaria wants the board of directors to make a choice between him and FGV chairman Isa Samad while proposing that MACC step in and investigate.

Zakaria was handpicked by the board of directors to be the president. Nevertheless, he and Isa have been on opposite sides over a number of issues regarding manpower and investment plans.

As Felda chairman Shahrir Abdul Samad has said, the credit facility extended to Safitex was a corporate issue of the company and could be handled in a more matured business approach by the group, and that both Zakaria and Isa should resolve this problem within the board of directors and be answerable to the shareholders.

Negative news have been no strangers to FGV of late. And with the conflicts between the incumbent president and chairman now made public, it will give MACC a better reason now to step in. This is anticipated to deal a severe bow on the already lackluster company business.

It is therefore essential for the board of directors to handle this issue cautiously so as not to adversely affect the group's future investment plans.

Felda is the biggest shareholder of FGV, holding some 34% of its shares. Any shift in FGV's business performance and investment directions will affect Felda, which boasts a multitude of settlers to whom FGV needs to answer.

FGV and other companies set up by Felda have been performing below market expectations in recent years, and this is bound to affect the confidence levels of shareholders as well as settlers. Mishandling of this matter could even have a negative political effect on this principal vote bank of BN.

Other than the issue involving senior FGV management, another urgent matter that warrants Felda's attention is its role in the FGV board of directors from this point onward.

Although Shahrir is the Felda chairman, he is not sitting on the FGV board, and there are no other Felda representatives in the FGV board either.

Even as FGV's largest shareholder, it is a shocking fact that Felda appears to have been left out of FGV's decision-making process. In this particular development, Shahrir has been left in the dark prior to this.

Indeed, Shahrir has been unhappy with FGV's business performance and investment returns ever since he took over Felda's chairmanship, believing that FGV should have done much better than this.

Unfortunately, there is little he can do as he is not sitting on FGV's board. It is absolutely necessary for Shahrir to be included in the FGV board or he won't be able to effectively represent Felda settlers and fight for their interests.

 

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