Zakaria: I'll respond to show-cause letter within the seven days

PETALING JAYA: Felda Global Ventures Holdings Bhd (FGV) group president and CEO Datuk Zakaria Arshad said he will respond to the allegations made against him by the board of directors within the stipulated seven-day period.

When contacted by SunBiz, Zakaria declined to reveal the details of the show-cause letter, saying only that he has been given seven days to respond to the issues outlined in the letter.

On Tuesday, FGV’s board of directors issued and served show-cause letters on Zakaria and group CFO Ahmad Tifli Mohd Talha in relation to the long outstanding debt of Safitex Trading LLC with Delima Oil Products Sdn Bhd (DOP).

The two individuals have until 4.30pm on June 20, 2017 to provide a written reply pertaining to the allegations mentioned in the show-cause letters and will continue to be on leave of absence until further notice.

Zakaria and Ahmad Tifli, together with FGV Trading CEO Ahmad Salman Omar and DOP senior general manager Kamarzaman Abd Karim, have been put on leave of absence since June 6.

According to sources, FGV alleged in the show-cause letter dated June 13, 2017 that Zakaria acted against the best interests of DOP and the FGV group. It said that Zakaria had contravened the group’s policies, terms of employment and code of conduct during his tenure as DOP CEO, palm downstream cluster head and group president and CEO.

Note that Zakaria was DOP CEO from Jan 1, 2010 till Oct 31, 2014; palm downstream cluster head from Jan 1, 2014 till March 31, 2016; and group president and CEO from April 1, 2016 till the present.

Among the allegations were Zakaria’s agreement to a proposal for continuing credit facilities for existing export buyers dated Nov 27, 2014, which sought the approval of Ahmad Tifli to allow DOP to continue with the credit term for existing customers, including Safitex.

This was despite the poor pattern recorded in Safitex’s account since 2014 with overdue outstanding balances increasing and exceeding the credit limit.

FGV also said that Zakaria approved an increase of the credit limit to Safitex to US$6.3 million and extended the credit term to 90 days without any evidence of evaluation of the financial standing in approving the credit limit and without any evaluation through a credit control committee.

The higher credit limit and extended credit term were also allegedly approved without securing any form of security.

In addition, Zakaria was accused of allowing continuation of sales to Safitex, despite Safitex breaching the credit limit of US$6.3 million, from August 2014 till October 2014.

Zakaria told SunBiz that he met Datuk Seri Idris Jala last week, and discussed only Safitex-related issues. Yesterday, Prime Minister Datuk Seri Najib Tun Razak said Idris has completed his fact-finding mission and is ready to submit his report.

Meanwhile, the Malaysian Anti-Corruption Commission (MACC) has not called Zakaria in for further questioning. Zakaria, who voluntarily provided information and documents to MACC last Wednesday, had said that he was likely to be summoned for further questioning.

The anti-graft body made a surprise visit to Menara Felda last Thursday and its official were seen leaving the building with various documents after the eight-hour visit. Since then, it has identified more than 50 individuals to be questioned, and has been requesting documents and recording statements of FGV staff since.