A worker walks through a palm oil plantation in Johor, Malaysia.

Goh Seng Chong | Bloomberg | Getty Images

A worker walks through a palm oil plantation in Johor, Malaysia.

CEO Zakaria Arshad has denied wrongdoing and refused to step down as instructed by chairman Mohd Isa Abdul Samad, according to a letter seen by Reuters. Zakaria had called on the Malaysian Anti-Corruption Commission (MACC) to conduct its own investigation.

The anti-corruption agency is looking into FGV following Tuesday’s developments and an investigation will be opened as soon as possible, MACC deputy chief commissioner Azam Baki told Reuters on Wednesday.

“We are looking into claims of graft and possible abuse of power involving several officials,” he said, declining to name the officials or give specifics on the claims.

Azam said he will be meeting Zakaria on Wednesday to seek his assistance in the probe.

Shares of FGV fell about 1 percent initially on Wednesday before rebounding to be up 2.5 percent. They had declined 6 percent on Tuesday, falling at one point to their lowest in five months.

“The news is bad to FGV and it may derail FGV’s restructuring efforts,” TA Securities said in a research note following Zakaria’s suspension.

“We believe there could be more negative news in the near future with regards to efficiency and integrity of the group,” it said.

Zakaria was perceived by FGV shareholders as someone who was focused on restructuring efforts and improving the share value, according to industry analysts.

He took over in April last year from Mohd Emir Mavani Abdullah, who was replaced after a failed controversial deal in 2015 to buy a stake in Indonesian palm oil firm PT Eagle High Plantations.

Since then, Zakaria has said FGV will rationalise its operations to address its “structural and financial issues.”

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