Part 3: Datuk Azhar’s To-Do list at FGV for 2018

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DATUK AZHAR’S TO-DO LIST AT FGV FOR 2018

 

In the first two parts of this three-part series, an analysis was made of the leadership changes at Felda Global Ventures (FGV), specifically focusing on Datuk Wira Azhar Abdul Hamid’s entry as chairman and whether he is qualified and capable to take on the challenges of the role.

 

Serious questions have been asked of Datuk Azhar’s track record and abilities in his previous positions, and whether he has the necessary skills, independence and mettle to take on the considerable challenges facing him.

 

In this final part of the series, here are the top four challenges Datuk Azhar must overcome in a what will surely be a challenging year ahead.

 

NO 1: KILL CORRUPTION

 

Group President and CEO Dato Zakaria Arshad and CFO Ahmad Tifli Mohd Talha quietly returned to work in October after going on forced leave in June, while outsiders like Pemandu CEO Datuk Seri Idris Jala and the Malaysian Anti-Corruption Commission (MACC) investigated FGV for corruption.

 

In the four months they were absent, former chairman Tan Sri Mohd Isa Abdul Samad, who requested that Zakaria and Ahmad Tifli and two others go on forced leave, has left the company.

 

There have also been huge upheavals in the board, including of course, the entry of a new chairman in Datuk Azhar.

 

But what were the findings of the investigations? What were the ‘recommendations, measures and options‘ that Datuk Seri Idris said he offered to Prime Minister Datuk Seri Najib Razak in June, when he completed the report?

 

Who has been brought to book? How has the company improved internally to prevent theft and corruption from occurring again?

 

FGV received over RM5 billion in cash from its 2012 listing pile but most of it is now gone. It has now come to light that FGV entered many, many questionable transactions which have drained the company — and the settlers who toil in the fields — of its money.

 

Our pension fund, EPF, knows that FGV is not properly managed, with many questionable individuals at fault, from the lowest-ranked to the highest in government, all involved.

 

To protect its unit holders — us, the employees — from further losses, EPF sold all its shares in FGV in July. EPF said it was especially concerned with the lack of separation between its board of directors and the major shareholders, namely the government.

 

Few people are aware of the co-called ‘Golden Share’ the government has in FGV and many, many other GLCs, where it is allowed to make important decisions on its own, without asking the permission of other shareholders. With the appointment of Datuk Azhar as Chairman, this concern remains.

 

EPF had previously also said that the chairman’s salary of RM2.67 million in 2016 was too high when compared to profits of RM31.5 million. This concern is a fair one. After all, which prudent business pays its Chairman a salary that is almost ten percent of its entire profits for the whole year?). As of now, it remains to be seen if Datuk Azhar will be paid the same amount, and whether it will be fair compared to the company’s performance.

 

There is also as yet little indication that the revamped board will be any more transparent or independent— only time will tell.

 

NO 2: BE WISE WITH ITS CASH

 

Having depleted the considerable cash pile from its 2012 listing, the company is now forced to sell its valuable assets to build it up again. This month, it sold almost all its shares in a lucrative insurance company called AXA Affin General Insurance for RM224.4 million.

 

To most companies this will be a huge amount and it’s the same with FGV.

 

Datuk Azhar needs to show FGV can be prudent and re-invest it wisely in the company and its settlers — and not strike corrupt deals to line their pockets like it has done in the past.

 

NO 3: BE GOOD TO ITS PEOPLE AND CARE FOR THE JUNGLES

 

Datuk Azhar will also need to show it is a responsible custodian of the natural resources under its control. It is now nearly two years since losing important sustainability certifications for all 58 of its palm oil mills nationwide and there is as yet no timetable for their reinstatement with the Roundtable on Sustainable Palm Oil (RSPO).

 

In fact, it was FGV which voluntarily withdrew from the certifications in May 2016, which insiders say was because the company was mistreating its workers at its Pasoh palm oil mill in Negeri Sembilan and for stealing 880 ha of natural peat lands in Sarawak which did not belong to it.

 

The only way FGV can mend its reputation and habit of stealing money and land which does not belong to it is by cleaning itself up.

 

Will Datuk Azhar be that saviour?

 

NO 4: FIGHT EVIL ENEMIES

 

FGV’s sugar business, via MSM Malaysia Holdings Bhd., of which Datuk Azhar is also the chairman, wants to expand overseas. Its so-called ‘Sugar Cluster’ has geared up for this expansion by investing in downstream operations such as raw sugar trading in Dubai and sugar refineries in Johor.

 

However, all this will count for little because of WIlmar International, the Singaporean agribusiness giant that FGV competes with outside Malaysia. According to reports, Wilmar, while one of the world’s largest palm-oil producers, has since 2015 become a huge global player in sugar markets. It reportedly spent $2.3 billion to buy up the entire world’s oversupply of sugar in 2015, allowing it to dictate global prices and enriching only itself.

 

Not surprisingly, market players are concerned that Wilmar is more interested in manipulating the global sugar market than competing fairly, a development that Datuk Azhar must take seriously and plan for.

 

Does he have the necessary skills and abilities to take on this global giant to ensure the company’s ongoing viability? Or will he leave again when the seat gets too hot, as he has shown in the past, for example at Tradewinds and Malakoff?

 

Overall then, 2018 is a huge year ahead for Datuk Azhar and his team.

 

Will he be able to deliver the goods or is he merely a front for the corrupted politicians which have caused the troubles at FGV since 2012?

 

Submitted by: TruthPrevails

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