This article first appeared in The Edge Malaysia Weekly on June 12, 2017 - June 18, 2017

SITTING in his office on the 49th floor of Menara FELDA, Tan Sri Mohd Isa Abdul Samad, non-executive chairman of Felda Global Ventures Holdings Bhd (FGV), appears to be unruffled by the current goings-on in the company. Considering that certain widely read blogs and news portals are questioning his capabilities and bringing up his past misconduct of money politics as a basis for him to be removed, he seems unperturbed.

In an interview with The Edge, Isa reveals what transpired at FGV. Below are excerpts from the interview:

The Edge: What’s going on at FGV, Tan Sri?

Tan Sri Mohd Isa Abdul Samad: It’s okay la. This is nothing — it’s normal, isn’t it? But he, [Datuk] Zakaria [Arshad], made it big when it’s actually a small issue.

He is divert[ing from] the issue. The real issue is, after the investigation, we found certain things [that are not right]. It is based on the PwC (PricewaterhouseCoopers) report, which says something is wrong. Then, it (the information) was passed to the board, who asked the internal audit [department] to investigate. It (internal audit department) found [discrepancies] and we engaged two foreign lawyers. That’s why we say we want to investigate more [before making any more statements].

So, basically, you followed due process?

That is normal. We followed the process.

The things investigated ... was it before he (Zakaria) joined FGV or in that period before he joined?

I can’t remember. He became the CEO last year. I think this Safitex [issue] is more than one year [old].

But he’s still responsible for it?

Yes, because he is the CEO. He was the CEO of Delima Oil Products [Sdn Bhd] and downstream cluster head.

What about the argument that the amount is small?

To him, it is small. To us, it is quite big — US$11 million.

Is it true that you were the one who brought Datuk Zakaria up to CEO?

I was the one who brought him to see the prime minister — three times.

You hand-picked him to be the CEO?

(Nods). Somebody asked me if I could work with him, I said ‘No problem!’

After the [current] issue is resolved, if he is found not guilty and he comes back, what is the problem? He said he cannot work with me … that is up to him.

How is your working relationship with Datuk Zakaria?

So far, okay.

There were rumours that late last year, there was some friction between you and Datuk Zakaria …

What is the problem? I don’t have problems with him.

So, it is not personal?

No, it is not personal, it is not personal. This is a policy matter.

Is it accurate to summarise it as a fight between the board and the management?

Not really. Why [do you say] the board is fighting with the management?

Because four of the management [executives] have been suspended while they are being investigated. And then, they are fighting back …

I don’t think it’s that way. The issue is very simple, [but] they want to divert [the issue], they don’t want to focus on the issue, they divert — they go and see MACC (Malaysian Anti-Corruption Commission).

It is nothing. If he wants to pay MACC a visit, it’s okay. [But] what is the purpose of him seeing MACC? To see MACC is a right; anyone can go and see MACC to make a report, follow up with your report, it is okay. But what is the purpose? Why [do] they want to divert the issue?

We don’t [want to divert the issue]. As a professional, you concentrate on the issue [at hand].

We don’t quite understand. The PwC report came about after the auditors had already signed off the last annual report. Were there discrepancies after the auditors signed off?

This [is about] the timing … first quarter, I think.

Tan Sri, Datuk Zakaria said he didn’t get the invite to some of the board meetings?

Memanglah … it is normal. [Because he is being investigated] and then, it came to this issue. Because it involved the CFO, we asked him to leave [on May 31]. This is normal.

The next day, we continued [our] meeting because it was not concluded on May 31. We extended three times — on the same issue, not new issues. So, there was no point inviting him, we would have asked him to leave because he is one of those involved (being investigated).

Tan Sri, now Datuk Seri Idris Jala has come in, so the government is stepping in. And you are the chairman. How do you feel about it?

I think I am very open. [It’s] okay, I’m very happy, I say, ‘Welcome’. And good as well, we can show him our findings, what PwC’s [findings are].

Tan Sri, you know, FELDA and FGV have not been performing very well, almost five years after listing. Is it due to management?

I can’t say. Our income is based on plantations. The main revenue — 70% — comes from plantations. You know that plantations [earnings] are all very volatile.

Tan Sri, when Datuk [Mohd] Emir [Mavani Abdullah] left and Datuk Zakaria came in, everyone seemed quite happy. But now, it has gone south again, the share price has taken a beating.

I think this is temporary. I think once everything is resolved, I think it should be all right, because this is normal for a company. If a company has a problem and it is published in the media, of course, the shares [price] will go down a bit. It’s normal.

Added to the fact that he is playing up so many issues.

At the leadership level, are you looking for someone to replace Zakaria?

Now we have formed a committee — three persons, Datuk Omar [Salim], Datuk [Mohd] Zafer (Mohd Hashim) and Azman Ahmad. These are the ones who are now running the show.

So, there’s now a committee taking care of the operations.

Until the issue is solved.

But how do you plan to solve it? How will the board decide what to do next? You are waiting for MACC to complete its investigation?

We are waiting for our inquiry first. Now we are investigating, after we have compiled everything, we will give the show-cause [letter] to him (Zakaria). Then, we’ll give him time, let’s say, one week. After one week, after his reply, we will sit again to see [what he replies].

It’s very hard to comprehend, something like this happening close to the elections. Is there something more to this fight?

It happened, what can we do? If we (the board) do not take action now, sooner or later, we’ll [have to] take action. Otherwise, the board will be responsible; the shareholders will say you (the board) are hiding something ... it will be worse. The board said, ‘We don’t want to go to prison.’ (Chuckles)

But Tan Sri, you know the picture being painted is that Datuk Zakaria has found some dirt, hence his dismissal.

He’s diverting the issue, konon pergi MACC. MACC [can come and investigate], what is the problem?

But Tan Sri, how do you feel when individuals, the online portals, dig up the past and bring it up, questioning your integrity?

This is politics. They always look at FELDA from the political point of view. All of them want to politicise [all issues]. We’ve got voters from 54 constituencies.

If I don’t take action, then you say the board is hiding something. If we take action, you say [Zakaria is] another victim [of mine].

Tan Sri, your contract, when does it expire?

Three of us (the chairman, group president and a board member) were appointed by the minister of finance. So, bila mahu keluar,

anytime je, takde masalah.

It doesn’t matter to you if they want to replace you?

No, it’s not my company. To say to you I’m ready to step down shows [that] I have nothing to hide. [But] I say it’s a non-issue, so why do I have to resign?

Do you think this sort of fighting in FGV will have an impact on the next general election?

I think after this one is solved, it is okay. I think it should be all right.

In a nutshell, when you ask him (Zakaria) to take leave, he didn’t want to?

After May 31, we found something wrong. So, the board said, ‘Why don’t you call Zakaria, ask him to resign, don’t make this a big issue for the sake of FGV.’

So, I told him, ‘I came here after the meeting.’ I said, ‘From the PwC and internal audit, we found [that you] did something wrong. The board asked me to talk to you (Zakaria) as a family [member]. You know, [ask] you to resign.’

He said he didn’t take anything. I said, ‘Zakaria, we are not accusing you of taking something, we are saying you did not follow the procedures.’ They are two different things.

Then, he went back to his office. The two secretaries showed him the findings in short notes. He read them. Then, two days later, before news came out on the TV, he wrote a letter to me.

He said he didn’t want to resign. We haven’t sent him any letters yet [at that time]. We only asked, as family, since the board said, ‘Why don’t you talk [to him].’

I did mention at the press conference that our action did not mean that we wanted to cover it up. No. We said, ‘You seem guilty, so they will need to conduct the formal process. But we don’t want you to make our company look bad.’

Then, he replied. He said it is normal practice, Emir (FGV’s former CEO Datuk Emir Manavi Abdullah) allowed this one [company, Safitex, 90 days leeway] during his time.

That’s why he followed. We thought, ‘If you knew at the time [that] it was the wrong procedure, why did you follow?’ If you become the new CEO, you have to stop [poor practices], right?

He said now that he is group CEO, because there are so many companies, he cannot micromanage. How can he say that?

He said the debt is [only] 0.2% of our FY2016 revenue, very small. How can you say that? What about profit and loss? US$11 million is not small … it is over RM40 million. He compared with the revenue, that shouldn’t be done. Even [a problem with] RM1 is wrong.

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