There seems to be a lot of undercurrents at FGV Holdings Bhd in Malaysia as it becomes the focus of ongoing speculation that the company had conducted a series of high levelled discussions to dispose its entire equity to foreign entities.
According to market sources, top of mind among industry players is the decision of President and Chief Executive Officer Datuk Zakaria Arshad who disposed of two or three non-core assets which were considered unprofitable, and the possible release of the entire FGV equity.
Nothing short of real-time drama, after Zakaria’s controversial and highly visible spat with former FGV chairman, Tan Sri Isa Abdul Samad (who saw Zakaria suspended from duty) and later, Isa was converted to SPAD, Zakaria stressed the need for FGV management to be managed by the company without political interference.
Since then, Zakaria has been seen to be working hard to return FGV to a stable financial position, including by disposing of FGV assets abroad for that purpose. His efforts appeared to be successful and for the financial year ended 31 December 2017, the FGV recorded profit after tax and minority interests (PATAMI) more than 100 percent to RM144 million compared to RM31 million for the corresponding period of the previous year.
As recent as in May, Zakaria denied the International Palm Oil Monitor (Ipom) report alleging two companies, being interested in FGV, especially one foreign interest - a joint venture between Tan Sri Peter Sondakh (Rajawali Group) and representative of PT Gama Plantation, owned by Indonesian Chinese tycoon, Martua Sitorus, one of the founders of Wilmar International Ltd. reportedly intend to inject assets into FGV shares. "It's a very irresponsible and incorrect statement," Zakaria said in a report to a press on May 4.
Sondakh, à flamboyant figure well connected to Malaysian political scene owns 37.6 percent stake in PT Eagle High Plantations while Sitorus's brother, Ganda has large plantation assets such as PT Agro Mandiri Semesta known as Gama Plantation and PT G
Ipom in its report claimed that FGV would announce a large-scale restructuring or take-over that is expected to take place before the 14th General Election (GE-14) on May 9. It seems really that this a mere fantasy and did not exist. But is the intention of the disposal really finished? Or is it still kept, waiting for the right moment after the firm monitoring of the Pakatan Harapan government now slips a little?
Zakaria’s stand in this seems to be unclear, one can also go as far as to say not committed at all in rejecting the sale of FGV shares. “As a growing company, we are open to any opportunity or potential to grow into the future.”
“Every plan will be evaluated by the management before being brought to the Board level and if necessary involve the shareholders' decision, we will do it in accordance with the set process, '' Zakaria said.
Since the rumours arise on the Ipom website, and not any major Malaysian newspapers or portals, many industry watchdogs feel that such transactions will still be finalized at the most opportune time.
The focus of the discussion in the industry is to which most qualified FGV stocks are released? Local or foreign? Of course, the current stance of Malaysians will be that they want to make transactions within Malaysian companies, not to foreigners.
The question is, the rumour that FGV is now focused on proposals from foreign entities solely. Is there really no local company interested? Zakaria needs to give a clear explanation in this regard as the issue of disposing of FGV shares is not merely a corporate transaction but is so close to the hearts of Felda settlers throughout the hinterland of Malaysia.