KUALA LUMPUR: After having served the Felda group for 35 years, recently-suspended group president and CEO of FGV Holdings Bhd, Zakaria Arshad, hoped he could leave the company on a more amicable note.
Unfortunately, the recent announcement by the board to suspend him from his posts effective Wednesday means it won’t happen the way he wants.
FGV, in an announcement to Bursa Malaysia, said a notice of inquiry had been issued to Zakaria following the conclusion of internal investigations into 10 critical issues that had resulted in financial loss for FGV and its shareholders.
It was reported that up to seven of these issues were related to FGV’s unit, Delima Oil Products Sdn Bhd, over delayed payment and delivery of goods involving Afghanistan-based customer, Safitex Trading LLC.
When contacted by Bernama today, Zakaria said that as of now, he will abide by the decision made by the management.
“I will not oppose and I will abide by the board’s decision. The only thing I want is for them to reconsider their decision as my contract will expire in March 2019, which is just a few months away,” he told Bernama.
Zakaria, who is the son of a Felda settler from Felda Palong 1, Negeri Sembilan, said he did not intend to come back to FGV after his contract ended and would take a break from the industry.
The 58-year-old took over as group president and CEO of FGV on April 1, 2016, replacing Mohd Emir Mavani Abdullah.
He was, however, suspended from duties in June 2017 as the group probed allegations of irregularities involving certain deals at Delima Oil Products. It was the second time in 15 months his service was disrupted.
Nevertheless, it is business as usual for FGV, which formed a special board committee, comprising chairman Azhar Abdul Hamid, and three other board members, Salmiah Ahmad, Mohamed Nazeeb P Alithambi and Hoi Lai Ping, who will take over the group’s responsibilities.
Zakaria’s suspension came right after the Ministry of Finance Inc (MoF Inc) had withdrawn his nomination as a government-appointed director at the world’s largest crude palm oil producer.
In its filing to the local bourse, FGV said the cessation as director takes effect upon the company receiving a letter from MoF Inc, FGV’s special shareholder, on Sept 12, 2018, withdrawing its nomination of Zakaria as a government-appointed director in implementing FGV’s new constitution, which was approved by its shareholders on June 28, 2018.
“The cessation is in accordance with Clause 89(3) of FGV’s new constitution,” it said.
Still, industry watchers are baffled.
While they understand that the withdrawal of Zakaria as FGV director was normal as the cessation was in accordance with the constitution, the recent suspension announcement came as a surprise.
They said only the chairman can comment on the action taken. However, Azhar was not reachable when contacted. He has been chairman of FGV for a year (from Sept 8, 2017).
Asked if both of them had a good working relationship, Zakaria said: “We were actually very close at the beginning.
“I respect him, with his vast experience in the corporate sector, in which I have not been exposed as much as him. I was hoping that together we could leverage on our expertise to benefit the company.”
Zakaria was also unsure if his suspension was on the basis of being a political appointee of the previous government.
“By right, FGV is under the government of the day, so of course, we have to follow. Outside, I am not active in politics.
“I have to accept it if I am found to be wrong,” he said.
A plantation analyst from Public Investment Bank, Chong Hoe Leong, said that it would be good to hear if the company could clear this case as soon as possible.
“But as of now, I think there will not be much impact on the company’s operations. It is a government-linked company, so any change in the political landscape would have some impact on the company itself.
“Of course, this is the risk that the market is always aware of, so we shall see, pending the investigations from the top management,” he said.
FGV shares have plunged since its US$3 billion initial public offering at RM4.55 per share in 2012.
Today, the counter ended at RM1.55 with 2.49 million shares transacted.