“It looks like Isa Samad is up to his dirty tricks again. This time he is trying to get rid of Zakaria Arshad, the Group President and CEO of Felda Global Ventures. And the reason he wants Zakaria out is because the CEO is too straight and cannot be made to approve the under-the-table deals that Isa wants approved. Furthermore, Isa is worried that once the MACC closes in on him Zakaria may not be prepared to cover his back and bury the evidence.”
THE CORRIDORS OF POWER
Raja Petra Kamarudin
It looked like a normal Felda Global Ventures Holdings Berhad (FGV) board meeting yesterday when its Chairman, Mohd Isa Abdul Samad, asked the board members to support the move to remove the company’s Group President and Chief Executive Officer, Zakaria Arshad. But it was not really a normal board meeting at all because Zakaria was not invited to attend the meeting and how can the company’s CEO be barred from a board meeting?
The excuse Isa offered for the removal of Zakaria involves a company called Delima Oil Products Sdn Bhd (DOP), a subsidiary of FGV, that is doing business with an Afghan company called Safitex. On 17th October 2015, DOP signed a contract with Safitex giving the Afghan company credit facilities for all sales of palm oil sold to the company. And Isa himself was present at the signing ceremony.
Safitex has been doing business with Felda for the last 20 years and the company is well-known to Felda. The terms that has been set by Felda is that Safitex pays 10% up-front on all orders and the balance after shipment. In fact, Isa is very close to the Afghan owner of that company and when Isa visits Dubai he is well looked after and entertained by the Safitex people
The Safitex owner, however, is currently stranded in Afghanistan so he has not been able to clear the payment for his September 2016 shipment, the money which normally comes from Dubai. And Isa is using that as an excuse to get rid of Zakaria, saying that the blame has to rest squarely on the shoulders of the CEO. Isa also alleges that Zakaria was not authorised to extend credit to Safitex and that if they had instead asked for a Letter of Credit then this problem would not have arisen.
The credit facilities that is being extended to Safitex, however, was in force even before Zakaria was appointed the Group President and CEO of FGV. It was a business arrangement that had already existed and which Zakaria just continued. And the board is aware of this plus is aware of the contract that was signed in October 2015, which was witnessed by Isa himself.
Hence if there was any breach of company governance then Isa and the entire board plus the management team would be equally guilty, especially Ahmad Salman Omar, the CEO of DOP, Kamarzaman Karim, the General Manager of Sales, and Mohamed Zubir Abd Razak. So why just target Zakaria alone and ignore the rest?
Clearly the ‘crime’ that Zakaria has been accused of committing is merely an excuse to get rid of him. Isa wants Zakaria to resign but he refused to do so because he knows he is not guilty of the crime he has been alleged to have committed. So Isa brought this matter to the board and is trying to get the board to endorse the move to sack Zakaria.
The board members, however, are not in favour of this unjust and high-handed action against Zakaria but they know if they do not go along with Isa their own positions would be in jeopardy because Isa can be very vindictive and would remove the board members as well.
If the board backs Isa’s move to sack Zakaria then this matter is going to end up in court and the shit is going to hit the fan. Not only has Zakaria been acting within his authority and has not breached any of the company’s governance but the real reason why Isa wants him removed is going to be revealed in court. And everyone will know why Isa wants to get rid of Zakaria.
Isa wants Zakaria out because he wants a yes man to take over as the new Group President and CEO. Being a non-executive Chairman, Isa cannot instruct Zakaria. He can only request. And many times when Isa asked Zakaria to do certain things he would not do so unless Isa puts those instructions in writing. Zakaria knows the danger of taking verbal instructions from Isa, especially when it is not completely legal, as later he would be held accountable and may even face action in court for that action.