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

WHEN The Edge spoke to Datuk Zakaria Arshad last Tuesday, he seemed ready to tell all at Felda Global Ventures Holdings Bhd (FGV), which he had helmed since April last year before he was unceremoniously suspended. He appeared irritable and at times, seemed unclear. Below are excerpts of the interview.

Datuk, what’s going on at FGV?

Zakaria: I am not a politician. Now, my intention is to bring the company [to a] better [position]. I can cut the cost, everything. So by doing that — let’s say, cut down the cost — maybe somebody has to lose his or her cut.

Perhaps previously, they (company officials) could travel anytime they like, but now they cannot do as they please. Previously, they could bring anyone they like, now they cannot.

I had to do this — [make sure everything is] just for the company’s benefit.

So, if let’s say there is any other proposal, or whatever that does not bring any benefit to the company ...

I did not want any other new mergers or acquisitions (M&A)… My focus is still on improving my bottom line and my core businesses. That is what I want to focus on.

Organically grow, Datuk?

At the moment, [I want to improve] organically. Later, when I have really stabilised the company, then only I go for M&A. But it will be very soon.

I think now is about time... I am open to any opportunities.

That means now you think you can do M&As?

I can do M&As. Previously, I didn’t want to do M&As as [it would end up with] nothing that I can show, you know.

People say, what happened to your ladang? (estate). Now there is a good momentum there (in cost-cutting). Although I don’t see yet that the costs have been reduced, the momentum of reducing them is there… the yield is there. I can look into other opportunities, I cannot just be sitting [idle] happily.

The PwC report ... you said you were not aware of it.

Yes, actually, there is no specific report asking me to look into all these things (the late payment from Safitex). The report was just a normal first quarter report. It did not even suggest allocating whatever [impairments or provisions] for the debt.

But usually, if there is an investigation, and you are one of the parties they are investigating, they will not involve you, right? Could that be the reason you’re not aware of it?

He (Tan Sri Isa Samad) asked me to go out, but I think it’s a bit ridiculous he asked me to leave, to resign, based on just the internal audit report.

If it’s [a report by] outsiders, then it is not too bad. If it’s PwC, I think it’s not too bad, impartial. But this is an internal audit. I can dispute it, yes.

That is why I think it’s not fair to me. I don’t know anything. What is my wrongdoing now? I don’t know — until now!

Have they actually given you a show-cause letter?

No, tak ada!

Are they planning to do it sometime soon?

I don’t know. Now [they] cannot [do so], because Datuk Seri Idris Jala has already come into the picture. Actually, they cannot do anything. The internal auditor cannot do anything now.

We heard about company secretaries showing you some footnotes explaining the issues to you?

What footnotes?

When they first informed you of the problems, we were told the company secretaries showed you some footnotes on the problems. Do you know anything about that?

Okay, I don’t know what you mean by footnotes, but what I can say is on May 31, the moment he (Isa) came out from the board meeting at 4pm, he asked me to go to his office.

We have two company secretaries, Ms Koo (Shuang Yen) and (Abd) Rashid (Atan). I came in and I sat down. He (Isa) said, we have a problem with the outstanding payment of Safitex. I think you have to resign.

I was shocked! I said — how come? Then I told him — how, Tan Sri? You know this fellow [from Safitex] — they were very close also — and then they now have a problem because they are stuck in Afghanistan, and all the properties are frozen.

Safitex is a big company. It has its own airline, hotel, shopping complex, distribution facilities and a few restaurants. It is not a small company.

So this company is very strong, but now it is having a tax [issue] in Afghanistan, all their assets are frozen until 20th of June. It will have a hearing [this month] in Afghanistan.

I told him — can we wait a bit, at least we can ask them to settle this thing (court case) there, and after that we can settle the due [payments]? Then he said — no, you have to resign.

And after that I said — okay, Tan Sri, I don’t want to say anything; I want to see the prime minister. They said they have already seen the PM. I said — I want to go see the PM. If the PM wants me to resign, I’ll resign. I told him that.

But Safitex has not paid since July 2015?

No, September 2016. That was the last payment. US$300,000. They had a problem after that; I know about it.

All the collection of bad debt, I left it to the CEO of the company, manager of the company. How come I am responsible for that?

If that’s the procedure, then there will be a lot of banks without their CEOs.

You had said, it seems, you don’t micromanage?

Yes, I said I don’t micromanage. How come [just with the issues regarding] the collection of money [in one subsidiary], you want me to resign?

To me, if it is bad debt, then it is a different story.

Then, there’s due process. It is ongoing! We sent them a letter and they promised to pay, but now they genuinely said that they are stuck there.

The company has already been with us [as a client] for over 21 years, with no big problem [before].

Did you inform the board that it was having difficulties paying. Was that ever brought up?

The board did not give me the chance to explain.

Datuk, did you give them (Safitex) credit without a letter?

Because this is [on the back of our relationship with them] for over 20 years. And we wanted to penetrate the market. Only a few [companies]; it was not everybody.

This fellow [from Safitex] knew Tan Sri Isa very well, not only me.

So it was not just you in the company who knew him?

Yes, yes. And they (the clients) are very genuine.

Were you involved in the meetings?

I was not involved, because they said — Zakaria, Tifli, you are excused; we want to discuss. But I overheard… ‘It’s with Safitex’, they said.

That’s all. That is the only thing I know. Until now, I don’t know the details of the discussion. I have not seen the minutes, I wrote to my secretary to see the minutes; until now I have not received them, and now I don’t have access.

I don’t know what’s happened in the office. I cannot even enter my office. The last time I was there, they did not even give me 30 minutes [to pack up]. They treated me like a criminal.

[It was] very bad … I was [accompanied] by the security and everything. [They said,] “Datuk, you have to leave the office now.”

What is this? I’m not a criminal. After 30 years [at Felda].

I finished my work, I took my personal belongings — only one — and I went off. Because I have nothing to hide. Now they want to see my office, go ahead. No problem.

What we find odd is that the government has actually stepped in. I mean, FGV is a listed company, and now the PMO has sent Idris Jala in. We find it a bit odd — it is not normal, right?

I think the reason is because things are out of control. Now you can see on the cyber platforms, everybody is attacking Tan Sri Isa. Even now, the second generation [Felda settlers] are already attacking them.

This whole thing is very political, isn’t it?

This is very political. To me, for the normal man, corporate man, it (the outstanding amount) is nothing. This is normal operations by a company. [Our subsidiary] Delima Oil Products... they did not collect the dues on time; it is only a delay in collection.

Not to be rude, Datuk, so you say you are clean? You have never taken anything?

If I’m not clean, how come I can go to MACC (Malaysian Anti-Corruption Commission) to give my statement voluntarily? I invite MACC to go to my office, to check everything.

You’ve come out very strongly saying that you cannot work with Tan Sri Isa anymore.

Actually, it is like this. The real thing I said was that it is difficult for me to [do my] work, if [the situation is] like this. I told them — difficult to work. I did not say all those other things.

FGV’s had a really bad five years since it was listed. It has faced problem after problem after problem.

That’s the thing. I think we need to clean all these things. The perception — the perception is very important. The [financial] results, I think, will turn out to be better and better. But now the perception is terrible.

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