A QUESTION OF BUSINESS | The snail’s pace reform at Felda’s listed star, which is not shining so bright right now, Felda Global Ventures Holdings or FGV, picked up some yesterday when it was finally announced that its former CEO Zakaria Arshad, would regain his position from Oct 16.
It was a situation of better late than never after a series of problems from June, from when it remained rudderless without a CEO for over four months, although an ex-plantation man was appointed chairperson more recently, about a month ago.
Zakaria was told to take a leave of absence together with three others on June 6 by then FGV chairperson Isa Abdul Samad. While the others had been reinstated, nothing was announced about Zakaria until yesterday, despite previous assurances that a decision will be made by September.
Such needless delay was compounded by the subsequent arrest and public humiliation of Isa by the MACC in August, in connection with corruption investigations in another Felda unit, Felda Investment Corporation, or FIC.
Isa (photo), who at that time had already stepped down as FGV chairperson and was appointed acting chairperson of SPAD, the important and powerful Public Land Transport Commission, was remanded for five days, and subsequently released on bail.
The late announcement of Zakaria’s reinstatement marks just one of a long period of mistake upon mistake at FGV with as much as seven-tenths of the value of the share from listing date being destroyed. It currently trades at around RM1.70 per share compared to RM5.30 at listing.
Isa had said on June 6 that it was a board decision for FGV CEO Zakaria to take an immediate leave of absence.
Zakaria hit back at Isa saying he had tried to stop hundreds of millions in investments by the company's board which he described as "ridiculous".
Amongst the investments, he said, were plans for a 100 million pound sterling (approximately RM551 million) expansion of Felda Cambridge Nanosystems Ltd, a nanocarbon 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.
Quick probe
The delay is all the more surprising considering that former cabinet minister and Pemandu (Performance Management and Delivery Unit) chief Idris Jala was appointed just two days after Zakaria’s suspension on June 6 to investigate the situation at FGV with the agreement of all major parties involved.
Idris’ investigation was quick. Prime Minister Najib Razak announced barely a week later that Idris’ report was ready and will be announced at an appropriate time. Najib said he also requested Idris to look into several steps and measures to solve the crisis.
"We are analysing all facts and the decisions would be best based on the three principles I have mentioned - according to company law, good governance and fair process," he said.
On Sept 8, three months after Zakaria was appointed, a former plantation man, Azhar Abdul Hamid (photo) was appointed chairperson of FGV. Azhar was once head of the plantations division at Sime Darby, until today the group’s main profit earner, and was acting CEO for a short period in 2010.
Ironically it was Felda Holdings managing director at that time, Mohd Bakke Salleh who took over his position at Sime Darby, his role then being reduced to special adviser to Bakke. He left and subsequently emerged at MRT Corp as CEO but quit in August 2014 over a construction site accident in Kota Damansara that claimed three lives.
His action at that time came under praise from various quarters for his courage and responsibility by assuming accountability for the accident and handing in his resignation, a rare thing in Malaysia. He subsequently became CEO of Syed Mokhtar Albukhary’s independent power producer Malakoff Corporation.
Talk was that Azhar was considered for the position of CEO at FGV ahead of its listing in 2012 but was passed up in favour of Mohammed Emir Mavani Abdullah, who was a director at Pemandu and during whose time FGV showed steep drops in the share price following very questionable decisions.
Dilly-dallying
The appointment of a CEO, which finally came yesterday, at FGV had been delayed long enough - one-third of a year already and even the chairperson, by most accounts a good candidate for the position, has been appointed for more than a month.
This dilly-dallying has gone on too long and is difficult to understand because Felda is a key area to concentrate on and get recurrent support for Umno in the elections. An estimated 54 parliamentary seats are in Felda areas, according to some estimates, amounting to nearly a quarter of seats.
Prime Minister Najib Razak recognises the need to maintain support in the Felda areas to stay in power which is why he announced some RM1.6 billion in incentives for Felda settlers.
It is difficult to understand why he has delayed for so long, putting Felda and FGV at risk and incurring massive needless losses in the meantime.
Isa may be a strong Najib ally but he has already proven to be a major liability at Felda and FGV. Still, Najib gave him a good position as SPAD acting chairperson after he left the Felda group.
Even Isa’s initial appointment ahead of the listing as chairperson of Felda and FGV was badly received considering that he previously was found guilty of money politics by Umno and suspended by the party.
FGV has suffered long enough and so have the settlers, many of whom invested in FGV with borrowed money. Instead of pacifying them with handouts, it is high time that FGV is put in order once and for all. If that’s done, FGV’s share price will improve.
The most important step in that direction is the appointment of a good, competent and honest chairperson and CEO, and a board which will give proper guidance and oversight to management without interfering in legitimate day-to-day operations.
It looks like that is in place now with Zakaria back as CEO and Azhar as chairperson with some new board appointments. If the interfering paws of meddlesome politicians are kept away and at bay and some hard, tough and sensible decisions are allowed to be taken by a professional management and board, there is no reason why FGV can’t move back to greater heights.
If that had been done from day one, FGV and Felda would not be in the miserable state that they find themselves in today from which it has to be lifted out.
P GUNASEGARAM says when politics and business mix, the result is disaster. E-mail: t.p.guna@gmail.com.- Mkini
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