Felda Global Ventures Holdings will embark on a rebranding exercise by changing its name to FGV Holdings in a bid to distance itself from its scandal-mired parent organisation and other subsidiaries. 

The agri-commodities and investment firm will also change the names of its subsidiaries in an exercise that might take up more than a year and cost RM2 million, chairman Azhar Abdul Hamid told reporters after a five hour AGM today.  

The resolution to change its name was proposed to the board at an extraordinary general meeting today, and was passed with 99% voting in favour following another hour of deliberation.

Federal Land Development Authority or Felda, a government agency originally tasked to uplift the rural poor, owns 33% of FGV. 

FGV will also be seeking its own headquarters, Azhar said at the Felda headquarters after the AGM today.  

Azhar, who was appointed chairman last September, said the rebranding was four months in the making, prompted by scandals, such as Felda Investment Corporation (FIC)‘s dubious purchase of a hotel in London. 

“It’s not just about enhancing (the brand). It’s also an avoidance issue. When news came out about FIC, people didn’t understand its relevance.

“People talk about the building in London, but it’s not ours. These are the corrective measures we are taking,” he said. 

“FGV is a commercial-listed entity. We have to be fair to our shareholders,” he added.  

The Malaysian Anti-Corruption Commission is investigating claims of discrepancies in the purchase of Park City Hotel in London, said to have been bought by FIC in 2014 for RM330 million, substantially over the estimated market price of RM110 million.

MACC is also investigating FIC’s 2015 purchase of a hotel in Kuching bought at RM160 million, over the estimate market value of RM50 million. 

Former Felda chairman Isa Samad was arrested last August over the hotel purchase. Isa was also chairman of FGV and FIC.

Police are also investigating his involvement in a fraud case in which the ownership of prime Felda land worth some RM270 million in Jalan Semarak, Kuala Lumpur, was transferred under dubious circumstances in 2015. 

Isa oversaw the listing of FGV as its chairman in June 2012. It was the world’s second-largest initial public offering  that year at US$3.1 billion (RM9.93 billion), after Facbook. He resigned last year. 

“I have to confess, FGV, somehow or another, looked like a political company. That’s why we have all these issues,” Azhar said today. 

“Good governance was not upheld, and they took investments in instances where proper due diligence was not carried out. But all that is in the past. 

“The new board members today are professionals and experts in their subject matters. They are people who, even if I wanted to, would never allow things to go astray. In many ways, I feel comforted.”

Azhar also said that the government had yet to decide on whether he and other two appointees from the Najib Razak administration should remain. 

The other two are group president and chief executive officer Zakaria Arshad and non-independent and non-executive director Siti Zauyah Md Desa.

Meanwhile, Azhar announced that FGV has appointed a UK-based legal firm to carry out a forensic audit on its RM1.1 billion acquisition of Asian Plantations in Sarawak, said to be overpriced by at least two-fold.

The land involves 24,622ha of oil palm plantations run by five wholly-owned estates around Miri and Bintulu in Sarawak.

FGV concluded the acquisition at end-October 2014 for RM628 million, assuming RM388 million in liabilities.

Azhar said today that, from a recent visit to the sites, large plots of land were found to be non-plantable and that the sale had involved some 700ha of land that Asian Plantations did not own. 

FGV acquired Asia Plantations after a voluntary conditional cash offer of £2.20 (RM11.60) per share.

The offer price was 5.4% higher than the weighted average price of Asian Plantations for the month prior to the offer. This translated into a premium of 294.7% over the net asset value per share of Asian Plantations as at December 31, 2013, the Edge reported last year. – June 28, 2018.