By Tony Pua
We welcome the government’s appointment of Idris Jala as an “independent party” to establish the facts of the case and recommend the way forward following the FGV board’s decision to suspend its chief executive officer, chief financial officer and two other senior members of the management team.
In his investigation process, Idris must not only look into the truth behind the purported trangressions by the suspended management team, he must also review the corporate governance practice within FGV, particularly the role of the board of directors.
The current board of directors comprise of a non-executive chairman, Isa; three non-executive directors – Omar Salim, Yahya Abd Jabar and Siti Zauyah Mohd Desa, who represent the finance ministry; four independent directors – Noor Ehsanuddin Mohd Harun Narrashid, Sulaiman Mahbob, Mohd Suffian Awang and Zafer Hashim, as well as the president and CEO, Zakaria Arshad, who was also the sole executive director on the board.
When Zakaria publicly alleged that the FGV Board had authorised “ridiculous deals” opposed by the executive committee, it raised the question of who is “running”’ FGV.
The “ridiculous deals” included a £100 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.
The problem is none of the board of directors, other than the CEO have “executive” functions. This means that they cannot be bringing “deals” directly to the board for its approval.
Excluding the independent directors, Isa and the three non-executive directors must explain what powers do they have in FGV to direct transactions which were specifically rejected by the management executive committee (Exco)?
The proper process should be any proposed transactions must be studied by the Exco and put forward to the board of directors for approval. The board, after deliberation, could then decide to agree or reject the proposed deal. It is not for any board member, even a non-executive chairman, to propose a transaction directly to the board for approval, more so if it has been specifically rejected by the Exco.
If the non-executive directors of FGV have failed in carrying out their grave responsibilities and fiduciary duties, then it should be recommended that they be sacked from their positions.
What’s more, Zakaria had further revealed direct interference by the board in FGV to award directly negotiated contracts without tender which he had wanted to stamp out since he was appointed just over a year ago in April 2016.
As a former minister who preached accountability in our GLCs, Idris must verify the very serious allegations above and take action against those who have broken the codes of corporate governance in FGV.
Finally, Malaysians call upon Idris to complete his investigations within two weeks so as to ensure the uncertainty within FGV, which is listed on Bursa Malaysia, can be resolved the soonest possible.
Tony Pua is Petaling Jaya Utara MP and DAP national publicity secretary.
With a firm belief in freedom of expression and without prejudice, FMT tries its best to share reliable content from third parties. Such articles are strictly the writer’s (or organisation’s) personal opinion. FMT does not necessarily endorse the views or opinions given by any third party content provider.