FGV suspends president/CEO Zakaria, notifies him of inquiry

13 Sep 2018 / 23:00 H.

    PETALING JAYA: FGV Holdings Bhd's board of directors has suspended group president and CEO Datuk Zakaria Arshad from his duties for the second time, following a notice of inquiry issued to him, with the conclusion of internal investigations into 10 critical issues.
    Each of these issues resulted in financial loss for FGV and its shareholders.
    The suspension is in effect until further notice from the board.
    SunBiz understands that Zakaria received the notice of inquiry from a board member at around 3pm today. He has until Sept 19 to respond.
    This is the second time Zakaria is being investigated in his two-year tenure as group president and CEO.
    In June last year, then FGV chairman Tan Sri Mohd Isa Abdul Samad was reported by the media to have asked for the resignation of Zakaria for going against corporate practices by allowing Safitex Trading LLC to make a purchase without a letter of credit.
    Zakaria was suspended on June 6, 2017 along with FGV's group CFO, Ahmad Tifli Mohd Talha, to pave the way for a domestic inquiry into the long-outstanding debt of Safitex Trading LLC owed to a subsidiary of FGV, Delima Oil Products Sdn Bhd.
    Datuk Seri Idris Jala was appointed a day later by the Prime Minister's Office to conduct the investigations, which also involved the Malaysian Anti-Corruption Commission. A few days later Isa, who was on the board of FGV for six years, resigned his posts, citing personal reasons.
    Zakaria resumed his duties on Oct 16 after MoF Inc, having reviewed the findings of the domestic inquiry, took into consideration the ongoing FGV transformation programme and Zakaria's commitment and assurance to resolve the long-outstanding debt of Safitex.
    In a filing with Bursa Malaysia today, FGV said it will continue its business as usual in Zakaria's absence.
    The Special Board Committee – comprising FGV chairman Datuk Wira Azhar Abdul Hamid, directors Datuk Dr Salmiah Ahmad and Dr Mohamed Nazeeb P Alithambi – and director Datin Ho Lai Ping will take over Zakaria's responsibilities.
    At a press conference last week, Azhar said several members of the board and management, past and present, were being investigated as part of its probe into transaction and investment decisions and business practices.
    Zakaria was absent at the briefing, which was chaired by Azhar and three independent directors.
    On Aug 28, the board announced that it had in January 2018 officially appointed forensic investigators to look into six transactions and/or investment decisions, which included the acquisition of Asia Plantations Ltd, investment in FGV Cambridge Nanosystems Ltd and the acquisition of the Troika condominiums.
    Additionally, the board undertook internal investigations into open credit lines, poor purchasing trading practices and poor palm oil sales that resulted in bad debts of about RM100 million; direct awards of procurement contracts in breach of best practices; and the critical shortage of workers between May 2016 and April 2018 that resulted in financial losses of more than RM170 million over the period.


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