AN independent panel is required for the huge task of investigating alleged irregularities and multimillion losses in FGV deals exposed by suspended CEO Zakaria Arshad, the Minority Shareholders Watchdog Group (MSWG) said today. 

MSWG general manager Lya Rahman said it is “crucial that all lapses, weaknesses and non-compliance of procedures and processes be rectified” soon.

Any investigation would have to be carried out expediently “in a most transparent and impartial manner” and without “political agendas” so that the company can be back to business as usual, she said.  

“FGV will have to quickly get back to clean its act and address investors’ confidence and hopefully its share price will perform. There is certainly a lot of work to be done. A humongous task ahead,” she said. 

FGV’s suspended CEO Zakaria Arshad has alleged that hundreds of millions were lost in questionable deals which the FGV board went ahead with although he had opposed.

They include the £100 million (RM550 million) additional investment in Felda Cambridge Nanosystems Ltd which had already lost RM117 million in the past few years and another RM300 million to acquire a 30% stake in a creamer factory, which is not part of Felda’s core business.

Zakaria was suspended on Tuesday  over a US$11.7 million (RM46 million) outstanding debt to FGV by Afghan firm Safitex for palm oil products supplied by FGV subsidiary Delima Oil Products Sdn Bhd.  

Lya said FGV can ill-afford more poor publicity that would further erode its financial position with its shares continuing to underperform.

“The question is who or which party is the appropriate body to be appointed to conduct the investigation.

“The concern is that if the investigation is conducted by the internal auditors, being part of the organisation, they may be subjected to undue influences,” she told The Malaysian Insight.

Lya added she was surprised that instead of an independent non-governmental related team, former Umno minister Idris Jala was appointed to conduct the investigation into FGV. 

“There does not seem to be any legal issue or implication in such an appointment… and there is also no question about Idris Jala’s competence considering his previous experience in the corporate world as well as his role in Pemandu.”

“However, it would add more credibility if the investigation is conducted by an independent professional who is not in any way related to the government,” Lya said. 

Other initiatives by Felda may suffer setbacks as normal operations are likely to be affected by the ensuing investigation, she said. – June 10, 2017.