KUALA LUMPUR: A resolution proposing the re-election of Federal Land Development Authority (Felda) representative Datuk Seri Abu Bakar Harun to the board of directors of Felda Global Ventures Holdings Bhd (FGV) had to be withdrawn yesterday after it could not get a seconder for the motion, amid the “winds of change”.

The lack of a seconder was a first for FGV chairman Datuk Wira Azhar Abdul Hamid, who described it as “a very unique situation”.

“The resolution that was withdrawn was the re-election of a director. It’s the first time in my life in an AGM (annual general meeting) that I couldn’t get a resolution to be seconded,” Azhar declared, but acknowledged it reflected shareholders’ sentiments.

A non-independent non-executive director, Abu Bakar, 57, is chairman of Pahang State Felda Affairs Committee and also the deputy chief of the Pekan Umno division. Former prime minister Datuk Seri Najib Razak is the member of parliament for Pekan, and is now under investigation by local authorities for alleged wrongdoings including money laundering involving monies belonging to state-owned fund 1Malaysia Development Bhd (1MDB).

1MDB’s global scandal was a key factor for many voters to dump Najib and his coalition Barisan Nasional (BN) in the 14th general election and give Pakatan Harapan a shot at governing after 61 years of unbroken BN rule.

Many previous constituencies considered BN strongholds swung to Pakatan including numerous Felda settlements, although in these settlements, settler voters were more motivated by their disgust at the mismanagement and controversial losses by FGV, and its 33.67% shareholder, Felda.

At FGV, forensic investigations into several dubious investments, previously undertaken by the group, are currently under way. They are likely to go on for at least another two months, Azhar said.

One such investment is Asian Plantations Ltd. “FGV paid some RM1.1 billion for that investment. I personally visited the plantation, and I found areas that are not plantable,” Azhar said. “I’ve also been informed that in the transaction, we were actually sold land that didn’t belong to them. This is a very serious matter, but we cannot just accuse [anyone].”

Speaking to reporters at Menara Felda after the group’s AGM, he said the group has appointed a legal firm in London to look into the matter, and not just from an accounting perspective. “Certainly, we are looking for a civil case, at least.”

In addition, FGV has also initiated legal action against Dubai-based Safitex Trading LLC — a client of a subsidiary company — to claim back some US$11 million (RM44.44 million) owed.

At an extraordinary general meeting following the AGM, shareholders approved the group’s name change, which was proposed to help prevent further confusion between the plantation giant and its largest substantial shareholder Felda. Immediate rebranding initiatives are expected to cost not more than RM2 million.

On speculation of a takeover involving FGV, Azhar said he has not received any proposals since his appointment as chairman in September 2017. “I honestly wonder where all these [speculations] are coming from. We have not been consulted, people are just talking. But certainly, FGV is always looking at opportunities to enhance value.”

Commenting on the new government’s minimum wage hike proposal, he said it will bring a “significant cost impact” on the group and the industry.

Combining basic salary, incentive programmes, housing benefits, insurance and levies, the amount borne by FGV works out to roughly the current minimum wage, he said. “Having foreign workers is not cheap for us. For every RM100 increase [in the minimum wage], the impact is [an additional] RM33 million in terms of production cost per year.”

Acknowledging that crude palm oil prices could remain under pressure in the near term, he said: “There is still margin there, it’s just that we are not making as much as we want to make.”

Planters ought to be happy with prices above RM2,000, he said, noting production cost ought to average RM1,500 to RM1,600 a tonne.

The group said it is on track to meet its target of 4.85 million tonnes of fresh fruit bunches this year, and to replant 15,000ha of mature trees to improve the age profile.

Currently trading at RM1.48 per share, FGV’s market capitalisation is RM5.4 billion.