FGV board says internal audit committee found "contraventions" not PwC

PETALING JAYA: Felda Global Ventures Holdings Bhd today clarified that potential contraventions of group policies were unearthed by the group's internal audit and not external auditor PricewaterhouseCoopers (PwC) as stated by its chairman Tan Sri Isa Samad at a press conference yesterday.

Isa had claimed that PwC found the alleged improprieties in the dealings between Delima Oil Products Sdn Bhd and Safitex Trading LLC.

In a statement released by the board earlier however, it stated that PwC highlighted the issue of the long outstanding debts of US$8.3 million by Safitex which led to an impairment exposure in its statutory financial audit for the financial year ended Dec 31, 2015, dated Feb 18, 2016.

"This matter has been continuously reported in PwC's subsequent quarterly review reports. Since then, management had continuously represented that the balance would be fully recoverable. Instead, the balance subsequently increased to US$11.7 million and exceeded the allocated credit limit per PwC's statutory financial audit for the financial year ended Dec 31, 2016 which was reported to the Audit Committee on Feb 17, 2017," the board said.

The transactions with Safitex involved the sale of edible oil and fats to Dubai-based Safitex meant for delivery to the Afghanistan market.

Three months after the report on April 20, 2017, the board instructed group's internal audit to carry out an investigation of this matter and detected potential contraventions of group policies, out of which a decision was made by the board to request four senior officers to go on leave of absence.