Claims of FGV’s ‘ridiculous deals’ untrue, says board

zakaria-arsyadPETALING JAYA: The board of directors of Felda Global Ventures Holdings (FGV) has denied claims it went ahead with two questionable investments that would cost the company millions despite objections from its president and CEO Zakaria Arshad.

In a statement today, FGV executive committee chairman Omar Salim said the board never agreed to a £100 million expansion (RM550 million) of subsidiary FGV Cambridge Nanosystems Ltd (FGV CNS) and an investment of RM300 million in a creamer factory.

He said there was no such expansion of FGV CNS and it was never presented to the board as alleged by Zakaria in news reports.

“The (claim of) RM117 million losses recorded by FGV CNS within the last three to four years is also not true,” Omar said.

“FGV took over FGV CNS in December 2013 and the losses incurred from 2014 to April 2017 were £5 million (RM27.5 million),” he said, adding that it was a start-up company at product development stage.

He added that contrary to what Zakaria was quoted as saying, the plan to invest RM300 million to acquire a 30% stake in a creamer factory was never approved by FGV’s investment committee.

FGV is a subsidiary of Felda which comes under the Prime Minister’s Department. Felda is a majority shareholder in the company with a 33% stake.

On June 6, Zakaria reportedly said he was overruled by the board on at least two occasions involving investments into non-plantation related businesses.

He said such decisions were made despite the board’s executive committee having agreed not to proceed initially.

Zakaria was reported to have said one of those two cases involved the decision to pump an additional RM550 million into FGV CNS over the next three to four years.

“The subsidiary had already lost RM117 million in the past three to four years,” he was quoted as saying by The Star.

Another questionable deal brought up by Zakaria pertained to an investment of RM300 million for a 30% stake in a factory located in Klang.

“Why do I want to put RM300 million in a non-core business?” he was quoted as saying.

“There are other examples, over direct negotiations, direct contracts. I’ve been entrusted with managing the company well and when I enforce it, then this is what happens.”

Zakaria was reported to have said this after he was asked by the board on June 6 to take leave with effect to allow investigations to proceed on the issue of a delayed payment by Afghan company Safitex to FGV subsidiary Delima Oil Products Sdn Bhd.

In a letter to FGV the day before, Zakaria defended himself against accusations of wrongdoing related to payments involving Safitex.

Besides Zakaria, FGV’s chief financial officer Ahmad Tifli Mohd Talha, Delima Oil Products senior general manager Kamarzaman Karim dan FGV Trading CEO Ahmad Salman Omar were also asked to go on leave.

The matter is now being investigated by the Malaysian Anti-Corruption Commission (MACC) which seized documents during a day-long raid at the company’s office on Thursday.

‘I cannot work in FGV if Isa still there’

FGV must explain ‘ridiculous deals’ allegation by CEO