Malaysian palm oil giant suspends CEO and CFO, probe launched over PwC findings

In a statement issued to Bursa Malaysia, the company said it could continue its business as usual.

Picture for representation
Malaysia's PM Najib delivers keynote address during launch of the prospectus of FGV in Kuala Lumpur Reuters

In an ongoing saga, group president and chief executive officer of Felda Global Ventures Holdings Bhd (FGV), Datuk Zakaria Arshad, alongside the group chief financial officer Ahmad Tifli Mohd Talha were suspended with immediate effect beginning today.

The Star Online reported that Zakaria received a letter which was signed by Tan Sri Isa Samad, chairman of FGV, which is one of the world's largest palm oil companies, that he had been relieved of all his duties in the company as well as its subsidiaries.

FGV, confirming the letter issuance, said both Zakaria and Ahmad Tifli was given a leave of absence beginning today pending an investigation of certain deals made under an FGV subsidiary, Delima Oil Products Sdn Bhd.

Zakaria, however, came to his defense saying that he was not agreeable to a number of investments the company had in the pipeline. He revealed that among the investments that did not get his nod was the Felda Cambridge Nanosystems Ltd, a nanocarbon producing company. Zakaria said the subsidiary experienced losses of RM117 million in the last three to four years.

"Now the FGV board want to expand, they need another 100 million pounds.To me, it is ridiculous as we are a plantation company," he said, as reported.

He added that he was present with the board to halt investments into the business where the board agreed but turned back on their agreement three weeks later, deciding to go ahead with the investments.

Zakaria said he also disagreed with the proposal to invest RM300 million for a 30% stake in a Klang-based creamer factory.

According to a June 5 dated letter sighted by Reuters, Zakaria declined to resign after being told to do so by Mohd Isa.

Zakaria said he was accused of performing wrongdoing in payment to an Afghan-based company that FGV had done business with via their subsidiary Delima Oil Products. He also said the chairman requested his resignation as president and FGV group CEO due to accusations that he had violated the corporate governance code while adding that the payment process was approved by the previous chief executive.

Mohd Isa, however, defended his move saying that the duo was told to go on leave as the probe into the deals had allegedly involved millions of Ringgit. Isa also said the investigation was ongoing which came to light following the findings of four investigations that were conducted by PricewaterhouseCoopers.

"Initial investigations unveiled an alleged discovery of activities that gave FGV no choice but to request Zakaria to step down to which he declined," Mohd Isa said.

In a statement issued to Bursa Malaysia, the company said it could continue its business as usual, while in the interim, a board executive committee comprising of two FGV directors Datuk Omar Salim and Datuk Mohd Zafer Mohd Hashim alongside Azman Ahmad who is head of logistics cluster would assume responsibility to perform the functions as the group president and CEO.