FGV starts legal proceedings against 14 former directors, employees

KUALA LUMPUR: FGV Holdings Bhd (FGV) has commenced legal proceedings in the Kuala Lumpur High Court against 14 former board members and employees in relation to the acquisition of Asian Plantations Ltd (APL).

In a filing with Bursa Malaysia, FGV said the legal proceedings were brought against, among others, the company's former group president/ chief executive officer and nonindependent non-executive director as well as its former chairman and non-executive director.

The suit concerns the company's acquisition of 100 per cent equity interest in APL via a voluntary conditional cash offer in 2014.

FGV brought the action against the board members for loss suffered from their failure to discharge their respective fiduciary duty, duty of fidelity and/or duty to exercise reasonable care, skill and diligence. The company is also seeking reliefs against the defendants for damages totalling RM514 million for loss from the acquisition of APL and, alternatively, damages for loss from the acquisition of APL to be assessed by court.

FGV is also seeking for reliefs for interest at the rate of five per cent per annum on damages awarded starting from the date of the filing of the suit until the date of full and final settlement.

It was also seeking interest at the rate of five per cent per annum on the amount of costs awarded starting from the date when the costs was awarded until the date of full and final settlement.

It is now assessing the financial impact arising from this litigation on the company and would make a further announcement at a later date.

“However, there is no impact on existing operations,” FGV said.

In a separate filing to Bursa Malaysia, FGV said that the forensic investigations into the acquisition of APL had concluded.

The board of directors are still in the process of reviewing the findings and legal advice of the three completed forensic investigations, as stated earlier, namely, the investment in FGV Cambridge Nanosystems Ltd, the acquisition of the Troika condominiums and the lease of company cars.

Two forensic investigations are in progress, namely the investment in FGV Green Energy Sdn Bhd and the acquisition of Yapidmas plantations in Sabah.

In its statement dated Aug 28, 2018, the board also reported that there were further on-going internal investigations into six matters.

The six matters included, among others, open credit lines, poor purchasing trading practices and poor palm oil sales that have resulted in bad debts of approximately RM100 million.

This also included direct awards of procurement contracts in breach of best practice and the critical shortage of workers between May 2016 and April 2018, that resulted in financial losses exceeding RM170 million over the period.

On the above mentioned investigations, the board has taken and was in the process of taking appropriate action.