This article first appeared in The Edge Malaysia Weekly on December 25, 2017 - December 31, 2017

FELDA Global Ventures Holdings Bhd (FGV) and its 33% parent the Federal Land Development Authority (FELDA) were regularly in the news this year, sometimes for the wrong reasons.

In early January, Tan Sri Shahrir Samad was appointed chairman of FELDA, as it was felt that it could not be seen as good corporate governance for Tan Sri Mohd Isa Abdul Samad to hold the chairmanship of FELDA and FGV.

Early in the year, there was also talk of the privatisation of the plantation giant. In March, the buzz was that Tan Sri Syed Mokhtar Albukhary would take control by injecting his plantation assets held under Tradewinds into FGV.

At about the same time, news broke that FELDA had acquired a 37% stake in Indonesian outfit, PT Eagle High Plantations Tbk, forking out US$505 million or about RM2.26 billion for a non-controlling stake. This acquisition created a stir as the same block of shares, owned by Tan Sri Peter Sondakh’s Rajawali group, had earlier been rejected by FGV.

By May, there was talk of a two-part plan whereby FELDA would buy back its plantation land from FGV and eventually detach itself from the publicly traded plantation company. The second part of this plan involved new shareholders injecting assets into FGV for shares and taking over the management of the company.

In early June, president and CEO Datuk Zakaria Arshad, CFO Ahmad Tifli and two others were told to take a leave of absence pending investigations into certain transactions of credit involving FGV subsidiary Delima Oil Products Sdn Bhd and Dubai-based Safitex Trading LLC.

According to market talk, a feud was brewing between Zakaria and FGV chairman Mohd Isa.

In mid-June, Mohd Isa stepped down as chairman of FGV and he was investigated by the Malaysian Anti-Corruption Commission (MACC). Tan Sri Sulaiman Mahbob was made acting chairman. In September, Datuk Azhar Abdul Hamid was brought in as chairman, replacing Sulaiman. He has been tasked with adding value to, and improving things, at FGV.

In mid-October, Zakaria resumed his duties as president and CEO.

More recently, The Edge reported that FGV was conducting an investigation into the acquisition of Asian Plantations Ltd, in particular the high price tag as well as the large amount of non-plantable land, and was contemplating pressing charges against those involved.

To put things into perspective, when FGV was listed five years ago, it had a cash pile of RM5.09 billion, but has been in a net debt situation since 2015.

Tan Sri Shahrir Samad

Chairman
The Federal Land Development Authority

Initially, Shahrir was often in the news as the new chairman of FELDA, suggesting what could be done to improve things at FGV and indicating his displeasure at the goings-on at the plantation company.

One of Shahrir’s first requests as chairman was for more board representation for FELDA at FGV, which has been looked into.

But in February, FELDA acquired 37% of Peter Sondakh’s Eagle High in a US$505 million deal. Usually, the benefits of any such large-scale acquisition would be loudly trumpeted but Shahrir has not spoken much about it.

Eagle High aside, as chairman of FELDA, the 33% shareholder of FGV, Shahrir will be under pressure to ensure the settlers’ interests are protected and that FGV starts performing.

FGV was listed in end-June 2012 at RM4.55 a share and hit a record high of RM5.44 on July 6 that year, but it has been downhill since. FGV’s stock ended at RM1.73 last Monday.

So, what will Shahrir do to assert himself at FGV? How will he extract value from FELDA’s 33% in FGV? And will FELDA’s acquisition of Eagle High bear fruit?

Datuk Azhar Abdul Hamid

Non-executive, non-independent chairman
Felda Global Ventures Holdings Bhd

The new chairman of FGV — although he holds a non-executive position — has already made his presence felt, cracking the whip at the troubled plantation giant.

In a brief conversation with The Edge about a month after he was appointed, he had said he was confident that FGV could still perform and realise its full potential as there was still a lot of value left in the company.

He is an experienced plantation chief, having been at the helm of Sime Darby Bhd’s plantation arm, Pernas International Holdings Bhd, which morphed into Tradewinds after it was taken over by Syed Mokhtar.

His name has often cropped up as the perfect candidate to lead FGV, largely because of his long-standing experience in the industry and strength of character.

An accountant by training, Azhar is referred to as a “no nonsense” sort of person and proved his mettle as Mass Rapid Transit Corp Sdn Bhd CEO. He stepped down as a matter of principle after a construction site accident claimed three lives.

However, will Azhar be given a free hand at FGV to do things his way?

Tan Sri Mohd Isa Abdul Samad

Acting chairman
Land Public Transport Commission

Mohd Isa was arrested by the MACC in August in connection with controversial hotel purchases in London and Kuching, Sarawak, by Felda Investment Corp, which is a wholly-owned unit of FELDA.

Not many would have believed that a political strongman like Mohd Isa — the menteri besar of Negeri Sembilan for 22 years and a former Umno vice-president — would be remanded for five days by graft investigators and wear the MACC’s orange lock-up attire.

Nevertheless, while Mohd Isa is no longer chairman of FELDA and FGV, he is acting chairman of the Land Public Transport Commission.

He may have been removed from FELDA and FGV, but he is still a formidable politician. His strength in Negeri Sembilan, especially among the grassroots, is commendable.

Will next year be better for Mohd Isa?

Datuk Zakaria Arshad

Group president, CEO
Felda Global Ventures Holdings Bhd

Having been given a second lease of life at FGV, all eyes will be on Zakaria and how long he remains at the plantation company. Some believe he may exit after the general election, slated for next year, but nothing concrete has been announced.

Zakaria showed his clout in the “feud” with chairman Mohd Isa — a political strongman — and seemingly came out on top.

He held regular press conferences, tweeted and even garnered the backing of some bloggers — but it seems it was his closeness to FELDA settlers and their fondness for him that helped him keep his job. Zakaria is a second-generation FELDA settler and is viewed by the settlers as one of their own.

With FELDA settlers making up the majority of voters in as many as 54 constituencies, not many would go against their wishes, especially so close to a general election.

To his credit, Zakaria showed strength of character when he took over in March 2016. He put his foot down and said that FGV was not going for any new acquisitions.

But after what happened at FGV — the domestic inquiry and other allegations — will he be able to run the company and take it to the next level?

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