Govt hopeful FGV will overcome challenges
KUALA LUMPUR: The government is hopeful that FGV Holdings Bhd can overcome the current challenges and turn around with the support of the threemember transformation plan team formed in July, says Primary Industries Minister Teresa Kok.
She acknowledged the challenges faced by the company, including the ongoing forensic audits and international investigations, as it tried to overcome uncertainty in the palm oil industry.
“The attitude of the organisation and the team members is important. Last week, I met the FGV team who briefed me on its transformation plan (to turn around the company),” said Kok after the Corporate Malaysia Summit 2018, here, yesterday.
As part of the turnaround plan, the board has set up a threemember special committee comprising chairman Datuk Wira Azhar Abdul Hamid, Datuk Dr Salmiah Ahmad and Dr Mohammed Nazeeb P. Alithambi.
Azhar said the company expected to complete its forensic audits and international investigations into six transactions and other investments by FGV by year-end.
He said FGV was awaiting legal advice on four of the completed investigations.
In a filing with Bursa Malaysia recently, FGV said investigations had been completed on four transactions, namely the acquisition of Asia Plantations Ltd, FGV’s investment in FGV Cambridge Nanosystems Ltd and acquisitions of two Troika condominiums located near the Petronas Twin Towers.
Additionally, the board has also undertaken internal investigations into open credit lines, poor purchasing trading practices and poor palm oil sales that resulted in bad debts of about RM100 million; direct awards of procurement contracts in breach of best practices; and critical shortage of workers between May 2016 and April this year, which resulted in losses exceeding RM170 million.
On mitigating further loss in the plantation sector, Kok said the ministry would help the company while urging FGV to develop the downstream sector of the palm oil industry.
“The ministry is willing to work with them. I told them that if I have the opportunity to meet with investors, we will try to assist them to invest in the industry.
“We told FGV about the challenges faced by the industry, especially on getting smallholders to comply with the Malaysia Sustainable Palm Oil certification.
“We need to engage with FGV and non-governmental organisations to go down to rural areas and explain the importance of getting five-star oil,” she said, adding that it was vital to get Malaysian palm oil accepted by the international community.
“Western countries have the tendency to trace back the oil and they do not want oil that does not comply with the environmental standard. If the smallholders do not comply with this, we fear that the product will be marginalised,” Kok added.
We need to engage with FGV and nongovernmental organisations to go down to rural areas and explain the importance of getting five-star oil.
Primary Industries Minister