GIVE FIRMS CHANCE TO RESOLVE WOES
EVERYONE loves a good corporate scandal. Malaysians are no exception to this. Our country is rife with examples to remind us of the need for good corporate governance, as well as how frameworks may have overlooked pockets of weaknesses, damaging not only the company’s image, but subsequently its investors, shareholders and insanely enough, the government.
Private and government-linked corporations have always resolved issues internally before handing them over to the authorities and the courts.
As was the case with Perwaja Steel, Maminco and a list of others, Felda Global Ventures Holdings (FGV) should be no exception.
For any single corporate entity, its board of directors and management should be allowed to manage and settle the internal crisis based on their own internal policies and processes, once given a mandate from their stakeholders.
Companies in crises have about a year to get their house in order, and prove that they have the confidence of their shareholders.
For listed companies, there is no way they can run from having a fiduciary responsibility to settle problems, in the interest of the company, shareholders and investors, which might even include their own workers.
It is, therefore, the duty of the company’s management to oversee the company’s performance and guarantee the implementation of its business plan will enhance the value for shareholders.
That being said, when questions regarding the management of projects which are scrutinised by the board of directors arise, the record needs to reflect who is involved, the motivation behind the project and the ways it will increase value for the fiduciary benefit of all shareholders.
Thus, when things go awry, there is a need to re-examine the framework within the company and find where the loopholes are, even if it is FGV.
After all, any internal investigation must be held in compliance with company policies, impartial adjudication, adherence to good governance and integrity standards, and ensuring fair due process and fair hearing — all of which are a normalcy for any company.
It is fair to say that as a listed company, measures to improve its performance and shareholder value in the long-term need to be put in place. These include ways to enhance yields and productivity, overcoming shortage of foreign labour and, of course, divesting from unprofitable investments
In other words, the company refocuses on being a main plantation player and returning to its roots to return value.
This will take time and money, but most of all, proper governance. While this is happening, what people don’t understand is diminishing shareholder value will disrupt the recovery of share price, which in the end means a loss not only for the main shareholders, but also the minority shareholders.
For most companies, it includes their staff. For FGV, it is the settlers, who have placed their value in the shares. We are looking at over 100,000 smallholders and their families.
We must respect the will of the shareholders, particularly this group within Felda that reinvested their wealth. Ultimately, whatever is done to recuperate and better its performance will be to
their judgment, which will be voiced out during the next annual general meeting.
Therefore, bad publicity and interference will, in the end, create a lose-lose situation akin to a torched field where no one shall reap any profits. But I digress.
We should allow due process to take its course, as we always have, by allowing the concept of innocence until proven guilty. Let FGV recover its share price by doing what it was established to do.
At the same time, the disciplinary inquiry must be allowed to proceed in a fair and just manner based on company law and its internal governance procedures. If it reaches court, so be it. HAFIDZ BAHAROM Damansara Perdana, Selangor