FGV plots to return to sustainable profits
04.09.2018 (The Star Online) - KUALA LUMPUR: The board of FGV Holdings Bhd, led by its chairman Datuk Wira Azhar Abdul Hamid, has introduced new production and cost targets for the plantation company as he plots a return to sustainable profitability.
The immediate turnaround plan entails the formation of a special board committee, establishment of transformation office, enhancements in plantation operation as well as review of investigations and proceeding with all legal recourse.
FGV had posted a net loss of RM21.9mil in the first six months ended June 30.
At a press conference yesterday, Azhar said FGV intended to boost its fresh fruit bunch (FFB) production from 4.65 million tonnes estimated this year to 5.6 million tonnes in 2019.
This means increasing the current yield per hectare to 20 tonnes.
Azhar said about 34% of the group’s estates have already meet this target and the focus is to increase yield from at least half of its estates.
“This is not going to happen overnight but it is not going to be too long before it happens,” he said.
Azhar was accompanied by three of the company’s independent directors but there was a glaring absence of his senior management except for newly appointed chief transformation officer Syed Mahdhar Syed Hussain.
When asked, Azhar said chief executive officer Datuk Zakaria Arshad and chief financial officer Ahmad Tifli Mohd Talha were unable to attend as they were in Turkey for a meeting.
FGV is in the midst of completing a fresh investigation into some of its recent deals.
At the briefing, Azhar said investigations on the six transactions and/or investment decisions, which began in January this year, are to be “narrowed down” by year-end, as some investigations involved overseas transactions.
Four of the investigations have been completed, which include the acquisition of Asia Plantations Ltd, the investment in FGV Cambridge Nanosystems Ltd and the acquisition of Troika condominiums near the Kuala Lumpur Twin Towers.
FGV’s lawyers are in the midst of finalising their recommendations and advice.
“The legal advice report will be completed in a couple of weeks. I can’t name the individuals (involved) but I think it is safe to say that the individuals range from board members and management employees.
“The only legal recourse that we (FGV) have is civil – claim for damages or loss. It is up to the relevant government authorities to see if they want to proceed with any other actions,” he said.
Azhar elaborated that there are “quite a few people involved” and they are “those we can identify as directly-linked to the transactions”.
“Under the Companies Act, the board has the highest responsibility for the management of a company.
“Ultimately, whether you are a board member or management, you have the obligation or responsibility to exercise due care and carry out your fiduciary duty properly to protect the interest of FGV,” he said.
As FGV goes through the investigation and legal process, Azhar stressed that the turnaround plan remained its key priority.
He said it is vital to ensure that values are implemented within the group, efficiency and effectiveness of operations enhanced, and good financial results generated.
“The board and management remains quite committed to this (turnaround plan),” he said.