This article first appeared in The Edge Financial Daily, on March 15, 2016.

KUALA LUMPUR: Felda Global Ventures Holdings Bhd (FGV), the world’s largest palm oil producer by planted acreage, said it is now deliberating on the change of its chief executive officer (CEO), a post currently held by Datuk Mohd Emir Mavani Abdullah.

The announcement comes amid various acquisitions that are still in the works, with some pending approval from shareholders, raising questions about whether negotiations could be scuttled.

“The board of FGV will deliberate on the appointment/change of FGV CEO and will make the requisite announcement immediately upon the receipt of the nomination letter from the relevant authority,” it said in a filing with Bursa Malaysia yesterday.

However, it did not disclose who the authority is.

Emir’s contract expired on July 15, 2015, and it is understood that he has been on a short-term contract since then.

FGV last Friday issued a statement, saying Emir will continue to serve as its CEO and president, after local media reported that he may be replaced next month.

According to a news report, Emir, who was appointed to his current post on Jan 1, 2013, is expected to be replaced by Datuk Zakaria Arshad, the head of the group’s downstream operations.

Emir is currently presiding over what is arguably one of the group’s most controversial acquisitions — the ongoing planned acquisition of a stake in Indonesia’s PT Eagle High Plantations Tbk, which was proposed at a time when the group was grappling with depressed palm oil prices and declining profits.

The deal initially involved the acquisition of a 37% stake in Eagle High for US$680 million (RM2.79 billion). However, analysts and substantial shareholder Employees Provident Fund had criticised the deal was expensive.  

However, Emir had defended the deal, saying FGV was not overpaying for the stake and it would not be taking on too much debt and that it was being pursued purely for commercial reasons.

The initial deal was later scrapped due to the change in market conditions.

Over the weekend, The Edge weekly, quoting sources, reported that FGV is out of the deal to buy the equity interest in Eagle High and other businesses from Rajawali and that Felda Investment Corp will instead but the 37% stake in Eagle High, as well as Rajawali’s sugar cane plantations and mills.

The group has also recently proposed to buy a 55% stake in Zhong Ling Nutril-Oil Holdings Ltd for RM976.25 million, which has raised concerns that FGV is embarking on too many acquisitions since its listing in 2012.

In a separate filing with Bursa yesterday, FGV said the terms and conditions of its two sale and purchase agreements (SPA 1 and SPA 2) regarding the proposed acquisition of the stake in Zhong Ling were made at “arm’s length and in the ordinary course of commercial negotiations”.

FGV on Feb 26 announced that it had entered into two conditional SPAs with Zhong Hai Investments Holdings Ltd and other vendors, for the transfer of 26.4% and 28.6% stakes in Zhong Ling for RM537.05 million and RM439.2 million respectively.

“As a result of the negotiations and based on parties having commenced the application process for approvals from the regulators in April 2015, parties agreed that the conditions precedent are to be fulfilled within five business days,” it added.

FGV noted that, however, the application to one of the regulators was cancelled pending more information on the investment from the group. “To date, no subsequent application has been submitted to the said regulator,” it said.

“Under no circumstances whatsoever does the board of FGV imposes an express or implied obligation on the regulators to process and approve any approval in connection with the proposed acquisition within any time period agreed by the parties in SPA 1 and SPA 2,” it added.

The acquisition is subject to shareholders’ approval.