Suspended Felda Global Ventures (FGVH) Chief Executive Officer, Dato’ Zakaria Arshad made very serious allegations that the Board of Directors approved “ridiculous deals”, despite the objections of the management executive committee.
The “ridiculous deals” included a GBP100 million (RM550 million) additional investment in Felda Cambridge Nanosystems Ltd which had already lost RM117 million in the past few years and another RM300 million to acquire a 30% stake in a creamer factory, which is not part of Felda’s core business.
More frighteningly, Zakaria also revealed direct interference by the Board in FGVH to award directly negotiated contracts without tender which he had wanted to stamp out since he was appointed just over a year ago in April 2016.
After nearly a week of the scandalous exposé, the Chairman of the Board of Directors, Tan Sri Mohd Isa Samad has refused to shed light on the above damaging allegations.
Yesterday, the Edge Financial Daily reported that Tan Sri Isa Samad claimed that Zakaria’s allegations weren’t the issue, and the only matter of concern was the purported irregular transactions between FGVH subsidiary, Delima Oil Sdn Bhd and Dubai-based Afgan company, Safitex Trading LLC.
When asked, Tan Sri Isa said, “I don’t want to make any statement on that one… Don’t divert the issue… we are talking about this (Safitex). Other topics will be discussed another day, after this has been resolved. For us, the focus now is the actions Zakaria has taken.”
Yes, Malaysians are indeed interested to get to the bottom of Safitex’s US$11.7 million (RM46 million) outstanding debt to FGVH. However, Malaysians are also equally, if not more interested in discovering the truth behind the RM550 million and RM300 million investments in the above-mentioned “ridiculous deals”.
These explosive exposés involving RM850 million and dodgy contract awards are no less serious than the RM46 million purported transgression by Dato’ Zakaria.
Tan Sri Isa has publicly dismissed calls for him to resign as the Chairman of the Board, claiming that there was no reason for him to do so. However, if the “ridiculous deals” allegations are indeed true, then the circumstances would certainly warrant his immediate resignation or sacking.
Tan Sri Isa’s refusal to explain or even deny the investments lends credence to the veracity that the Board has indeed approved these “ridiculous deals”.
On that basis alone, just as the Board has suspended the CEO and four others in the company’s management pending internal audit investigations, we call upon the Government, who is the controlling shareholder of FGVH, to immediately suspend Tan Sri Isa as the Chairman, pending investigations.
There is absolutely no reason for the double-standards in treatment where Dato’ Zakaria and four others are suspended for a RM46 million transgression, but Tan Sri Isa Samad gets away scot-free for violating corporate governance ethics by pushing through the approval of RM850 million of “ridiculous deals” despite being merely a non-executive Chairman.
Showing posts with label Zakaria Arshad. Show all posts
Showing posts with label Zakaria Arshad. Show all posts
Saturday, June 10, 2017
Friday, June 09, 2017
It is time for the Auditor-General and Public Accounts Committee to investigate the shenanigans which has taken place in Felda Global Ventures Holdings Bhd
Both the FGVH Chairman, Tan Sri Mohd Isa Samad and the Chief Executive Officer (CEO), Dato’ Zakaria Arshad have traded barbs and accusations against each other on irregular transactions and activities which have taken place in the struggling plantation company.
The CEO has accused the Board of Directors of approving “ridiculous deals”, despite the objections of the management executive committee. The “ridiculous deals” included a GBP100 million additional investment in Felda Cambridge Nanosystems Ltd which had already lost RM117 million in the past few years and another RM300 to acquire a 30% stake in a creamer factory, which is not part of Felda’s core business.
Tan Sri Isa and the Board of Directors have to date failed to provide any clarity or rebuttal against the CEO allegations, lending credence to the veracity that the Board has indeed approved these “ridiculous deals”.
On the other hand, Tan Sri Isa has led the Board to suspend the CEO and four other members of the Management, including the Chief Financial Officer for alleged irregularities in payments from a Dubai-based Afgan company, Safitex Trading LLC to a FGVH subsidiary, Delima Oil Sdn Bhd.
According to the Board, Safitex’s debt to FGVH increased from US$8.3 million in 2015 to US$11.7 million in 2016.
Dato’ Zakaria has publicly denied any wrongdoing or “violation of the corporate governance code”. Initially, in a letter to the Chairman dated 5 June 2017, Reuters reported that he claimed “The payment process... was approved and implemented by the previous chief executive...”
He has also insisted that the amount involved was only US$11.7 million, barely 0.2% of FGVH’s total revenue which did not justify the gravity of the actions taken by Tan Sri Isa.
Yesterday, in a Edge Financial Daily report, Dato’ Zakaria further insisted that the Safitex debt is “100% recoverable”.
However, despite the denial and the attempt to make light of any possible transgression in the above payment, Dato’ Zakaria did not sound convincing in the reasons for the delay of payment by the Afgan company.
No tangible reasons have been given as to why the sum has been outstanding since 2015, or why it would be recoverable. It further begs the question as to why the Afgan company has been given such special leeway in payment terms, particularly since the sums involved were so small in the first place.
Juxtaposed against the company’s performance where its profits plunged dramatically from RM982 million in 2013 to RM325 million, RM182 million and RM31 million in 2014, 2015 and 2016 respectively, the exposes by both the Board and the Management raises major questions on the scale of shenanigans taking place in FGVH over the past few years.
Therefore, the dire situation in FGVH demands more than merely the appointment of Dato’ Seri Idris Jala to be an “independent party” to establish the facts of the case and recommend the way forward. The former Minister’s appointment and any outcomes arising from his appointment will smell of a political compromise and smack of opaque cover ups.
The gravity of the failure and imbroglio in FGVH demands a thorough investigative audit by both the Auditor-General (AG) as well as the parliamentary Public Accounts Committee (PAC). This will not be the first time an audit is carried out in a public-listed company substantially owned and controlled by the Government. Previously, the PAC has also carried out a thorough investigations of the construction of KLIA2 by Malaysia Airports Holdings Berhad.
Both the AG and the PAC have previously refused to re-open investigations into the 1MDB scandal despite new incriminating evidence from the United States Department of Justice, as well as to initiate investigations into SRC International for transferring tens of millions of ringgit into the personal bank account of the Prime Minister.
However, Malaysians hope that both the AG and the PAC will still carry out part of their responsibility to investigate major shenanigans in government-linked companies to protect the interest of the nation’s taxpayers. The failure by the AG and the PAC to do so would only go to prove that these vital institutions have been severely compromised to ensure that only minor infractions in the civil service will be investigated.
The CEO has accused the Board of Directors of approving “ridiculous deals”, despite the objections of the management executive committee. The “ridiculous deals” included a GBP100 million additional investment in Felda Cambridge Nanosystems Ltd which had already lost RM117 million in the past few years and another RM300 to acquire a 30% stake in a creamer factory, which is not part of Felda’s core business.
Tan Sri Isa and the Board of Directors have to date failed to provide any clarity or rebuttal against the CEO allegations, lending credence to the veracity that the Board has indeed approved these “ridiculous deals”.
On the other hand, Tan Sri Isa has led the Board to suspend the CEO and four other members of the Management, including the Chief Financial Officer for alleged irregularities in payments from a Dubai-based Afgan company, Safitex Trading LLC to a FGVH subsidiary, Delima Oil Sdn Bhd.
According to the Board, Safitex’s debt to FGVH increased from US$8.3 million in 2015 to US$11.7 million in 2016.
Dato’ Zakaria has publicly denied any wrongdoing or “violation of the corporate governance code”. Initially, in a letter to the Chairman dated 5 June 2017, Reuters reported that he claimed “The payment process... was approved and implemented by the previous chief executive...”
He has also insisted that the amount involved was only US$11.7 million, barely 0.2% of FGVH’s total revenue which did not justify the gravity of the actions taken by Tan Sri Isa.
Yesterday, in a Edge Financial Daily report, Dato’ Zakaria further insisted that the Safitex debt is “100% recoverable”.
However, despite the denial and the attempt to make light of any possible transgression in the above payment, Dato’ Zakaria did not sound convincing in the reasons for the delay of payment by the Afgan company.
No tangible reasons have been given as to why the sum has been outstanding since 2015, or why it would be recoverable. It further begs the question as to why the Afgan company has been given such special leeway in payment terms, particularly since the sums involved were so small in the first place.
Juxtaposed against the company’s performance where its profits plunged dramatically from RM982 million in 2013 to RM325 million, RM182 million and RM31 million in 2014, 2015 and 2016 respectively, the exposes by both the Board and the Management raises major questions on the scale of shenanigans taking place in FGVH over the past few years.
Therefore, the dire situation in FGVH demands more than merely the appointment of Dato’ Seri Idris Jala to be an “independent party” to establish the facts of the case and recommend the way forward. The former Minister’s appointment and any outcomes arising from his appointment will smell of a political compromise and smack of opaque cover ups.
The gravity of the failure and imbroglio in FGVH demands a thorough investigative audit by both the Auditor-General (AG) as well as the parliamentary Public Accounts Committee (PAC). This will not be the first time an audit is carried out in a public-listed company substantially owned and controlled by the Government. Previously, the PAC has also carried out a thorough investigations of the construction of KLIA2 by Malaysia Airports Holdings Berhad.
Both the AG and the PAC have previously refused to re-open investigations into the 1MDB scandal despite new incriminating evidence from the United States Department of Justice, as well as to initiate investigations into SRC International for transferring tens of millions of ringgit into the personal bank account of the Prime Minister.
However, Malaysians hope that both the AG and the PAC will still carry out part of their responsibility to investigate major shenanigans in government-linked companies to protect the interest of the nation’s taxpayers. The failure by the AG and the PAC to do so would only go to prove that these vital institutions have been severely compromised to ensure that only minor infractions in the civil service will be investigated.
Wednesday, June 07, 2017
Felda Global Ventures Holdings Chairman must explain suspended CEO’s allegations of “ridiculous deals” steamrolled by the FGVH Board of Directors
The Board of Directors of FGVH has suspended both the Chief Executive Officer (CEO), Dato’ Zakaria Arshad and the Chief Financial Officer (CFO), Ahmad Tilfi Mohd Talha pending internal audit investigations over purported irregularities in payments made by a subsidiary company.
Until such a time where there is greater clarity on what the purported irregularities are, Malaysians can give the Board of Directors the initial benefit of the doubt as we are sick of hearing cases of misappropriation and corruption in government-linked companies (GLCs) which never get investigated or the perpetrators never getting prosecuted.
However, what is most shocking is the revelation by the suspended CEO that he was being punished for attempting to block “ridiculous deals” from being approved by the Board of Directors.
Amongst the investments, he said, was plans for a GBP100 million (RM551 million) expansion of Felda Cambridge Nanosystems Ltd, a nano carbon company, which had already lost RM117 million in the last three to four years. "Now they (the FGV board) want to expand, they need another 100 million pounds. To me this is ridiculous, we're a plantation company," he was quoted as saying by The Star.
Another investment, Zakaria said, was the plan to spend RM300 million to acquire a 30 percent stake in a creamer factory, owned by a company primarily involved in making cans. "Why do I want to put RM300 million for a non-core business? They also overruled, even though exco already said no-go but the investment was given the go-ahead," he said.
More frighteningly, Zakaria also revealed direct interference by the Board in FGVH to award directly negotiated contracts without tender which he had wanted to stamp out since he was appointed just over a year ago in April 2016.
These are shocking revelations, which to a certain extent explains how purportedly the largest plantation company in the world saw its profits plunged dramatically from RM982 million in 2013 to RM325 million, RM182 million and RM31 million in 2014, 2015 and 2016 respectively.
The above doesn’t yet take into account the botched US$680 million (RM2.9 billion) acquisition of a 37% stake in Eagle High Plantations at an astronomical price which FGVH could in no way afford.
Based on the latest financial statement in March 2017, FGVH has only RM1.8 billion in cash left while it has to service loans and borrowings exceeding RM4 billion.
Tan Sri Isa must immediately confirm if what Dato’ Zakaria said is true and provide the valid reasons why the Board of Directors are making executive decisions which overruled the company’s top management team and executive committee.
The failure of FGVH Non-Executive Chairman to explain the above scandalous allegations will expose himself to the “violation of corporate governance code”, the very wrongdoing which the FGVH CEO and CFO are purported guilty of.
Until such a time where there is greater clarity on what the purported irregularities are, Malaysians can give the Board of Directors the initial benefit of the doubt as we are sick of hearing cases of misappropriation and corruption in government-linked companies (GLCs) which never get investigated or the perpetrators never getting prosecuted.
However, what is most shocking is the revelation by the suspended CEO that he was being punished for attempting to block “ridiculous deals” from being approved by the Board of Directors.
Amongst the investments, he said, was plans for a GBP100 million (RM551 million) expansion of Felda Cambridge Nanosystems Ltd, a nano carbon company, which had already lost RM117 million in the last three to four years. "Now they (the FGV board) want to expand, they need another 100 million pounds. To me this is ridiculous, we're a plantation company," he was quoted as saying by The Star.
Another investment, Zakaria said, was the plan to spend RM300 million to acquire a 30 percent stake in a creamer factory, owned by a company primarily involved in making cans. "Why do I want to put RM300 million for a non-core business? They also overruled, even though exco already said no-go but the investment was given the go-ahead," he said.
More frighteningly, Zakaria also revealed direct interference by the Board in FGVH to award directly negotiated contracts without tender which he had wanted to stamp out since he was appointed just over a year ago in April 2016.
These are shocking revelations, which to a certain extent explains how purportedly the largest plantation company in the world saw its profits plunged dramatically from RM982 million in 2013 to RM325 million, RM182 million and RM31 million in 2014, 2015 and 2016 respectively.
The above doesn’t yet take into account the botched US$680 million (RM2.9 billion) acquisition of a 37% stake in Eagle High Plantations at an astronomical price which FGVH could in no way afford.
Based on the latest financial statement in March 2017, FGVH has only RM1.8 billion in cash left while it has to service loans and borrowings exceeding RM4 billion.
Tan Sri Isa must immediately confirm if what Dato’ Zakaria said is true and provide the valid reasons why the Board of Directors are making executive decisions which overruled the company’s top management team and executive committee.
The failure of FGVH Non-Executive Chairman to explain the above scandalous allegations will expose himself to the “violation of corporate governance code”, the very wrongdoing which the FGVH CEO and CFO are purported guilty of.
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