Isa Samad orders FGV top execs to take leave

KUALA LUMPUR: A boardroom tussle at Felda Global Ventures Holdings Bhd (FGV) has resulted in its CEO and CFO being forced to take leave of absence while investigations are conducted on alleged discrepancies which involved "many millions of ringgit".

FGV chairman Tan Sri Mohd Isa Abdul Samad said letters for leave of absence were issued to CEO Datuk Zakaria Arshad and CFO Ahmad Tifli Mohd Talha this morning.

FGV Trading CEO Ahmad Salman Omar and Delima Oil Products Sdn Bhd (DOP) senior general manager Kamarzaman Abd Karim were also forced to take leave of absence.

According to Isa, the issue surfaced when its external auditor Pricewaterhouse-Coopers (PwC) discovered some alleged discrepancies in the dealings between DOP, a subsidiary of FGV and Dubai-based Safitex, which was reported to the internal audit, prompting an investigation.

"From the internal audit investigation, it was found that there were a few alleged discrepancies and we got an external legal firm to look into the aspects or findings that were found by our internal audit. After that, some of the alleged discrepancies were found to be true, as highlighted by PwC," he told reporters at a press conference today.

Isa said a board meeting was held on May 31, after which the board instructed him to inform Zakaria of the findings. The board had also suggested that Zakaria resign in view of the findings.

"The board's suggestion is for Zakaria to resign so that it won't become a big issue. It doesn't mean we are trying to cover up. We don't want this matter to blow up into a big issue," he said, adding that no allegations have been made against Zakaria to date.

Isa said with Zakaria on leave of absence, the internal audit's investigation will continue, after which a show-cause letter will be issued to Zakaria, who will be given time to respond. The board will make a decision after considering Zakaria's response.

No estimated time frame was given for the investigation or Zakaria's leave of absence.

Isa, who initially did not respond to questions of when PwC detected the issue, said the external auditor reported the issue "a few months ago".

He said the only issue at hand is related to the dealings between DOP and Safitex but did not discount the possibility of "new findings" that may crop up during the investigation.

Isa declined to reveal details of PwC's findings or the estimated damage, saying that it involves "millions" and possibly more. He also declined to comment on the nature of the discrepancies or whether bribery was involved.

On Monday, Zakaria issued a letter saying he will not resign and that the dealings between DOP and Safitex had been approved by the previous management.

Asked to comment on this, an agitated Isa said: "This is the thing that needs to be investigated."

Isa, who is on the board of DOP, said he was not aware of these issues before they were highlighted by PwC.

On whether the DOP board, including himself, are being investigated, he said he is not involved in DOP's business transactions.