KUALA LUMPUR (June 13): Bargain-hunting investors were quick to accumulate shares of scandal-ridden Felda Global Ventures Holdings Bhd (FGV) today after a wave of selling early last week.
The stock closed the day up seven sen or 4.22% at RM1.73. Buy volume outnumbered sell volume, with over 48.64 million shares traded, making it the third most active counter on the first trading day of the week.
FGV's latest downward rally, which started on May 22 and further accelerated last week in light of corporate governance issues, and later claims of corruption and abuse of power among its higher management, dragged the counter to a 35-week low of RM1.62 a week ago, before recovering slightly to RM1.66 last Friday.
Over the weekend, Prime Minister Datuk Seri Najib Razak reportedly told Felda settlers in Kulai, Johor, that he wants the corporate tussle in FGV to be resolved before Ramadhan ends, which is on June 24.
Meanwhile, Tan Sri Shahrir Samad, chairman of Federal Land Development Authority (Felda), which owns 33% of FGV, was reported saying that the agency had on May 26 requested for three Felda representatives to be on FGV's board, but the request garnered no response.
The Malaysian Anti-Corruption Commission (MACC) will interview over 50 FGV senior executives — including chairman Tan Sri Isa Samad if necessary — beginning today to assist the investigation.
In a nutshell, four FGV executives, including chief executive officer Datuk Zakaria Arshad, were told to go on indefinite forced leave pending an internal investigation on discrepancies involving a client's payment to a subsidiary of the palm oil giant.
A feud later ensued between Zakaria and Isa. Zakaria, who earlier refused a request by FGV's board of directors to resign because of the matter, then went to MACC with claims of graft and power abuse in the company.
MACC seized documents in FGV's headquarters the day after former minister Datuk Seri Idris Jala was appointed by the Prime Minister's office to oversee the internal investigation.
With less than two weeks to go before the deadline set up by Najib, investors and pundits will be anticipating the outcome of Idris's interference in the turmoil.
The development, analysts said, will not negatively impact FGV's financial performance in the near term. However, the possible reshuffling of its management team while Zakaria is halfway through his cost-cutting strategy to lift the company's earnings may distort public confidence and put more downward pressure on its counter.
FGV shares have gained 11.61% year-to-date, but recovery will be slow and painstaking for the counter to scratch the surface of its 2012 IPO pricing of RM4.55 apiece. At RM1.73, the company has a market capitalisation of RM6.28 billion.