Malaysia's Felda Global suspends CEO after he refuses to quit

The chairman of Malaysia's Felda Global Ventures Holdings Bhd has asked chief executive Zakaria Arshad (pictured) to resign.
The chairman of Malaysia's Felda Global Ventures Holdings Bhd has asked chief executive Zakaria Arshad (pictured) to resign.PHOTO: THE STAR/ASIA NEWS NETWORK

KUALA LUMPUR (REUTERS) - Malaysia's Felda Global Ventures Holdings Bhd said its board had ordered its chief executive and chief financial officer to take leave of absence on Tuesday (June 6), as it looks into certain transactions at a unit.

Shares in the company, the world's third biggest palm plantations operator, dropped 4 per cent before trading was halted.

CEO Zakaria Arshad had refused to resign after being asked to do so by Chairman Mohd Isa Abdul Samad, according to a letter seen by Reuters.

According to the June 5 letter by Zakaria to Mohd Isa, Zakaria said he had been accused of wrongdoing in payments to a Afghan company that Felda Global had done business with via its subsidiary, Delima Oil Products Sdn Bhd.

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"The chairman has asked that I resign as president and FGV group chief executive due to accusations that I have violated corporate governance code," he said in the letter. "The payment process... was approved and implemented by the previous chief executive... I am not guilty of those accusations and will not resign as instructed."

Mohd Isa is scheduled to hold a press conference at 0530 GMT.

Zakaria was appointed in April last year, replacing Felda Global's previous chief executive who oversaw a failed controversial deal to buy a stake in Indonesia's PT Eagle High Plantations Tbk.

A board committee will take on the functions of the CEO in the interim, the company said, adding that CFO Ahmad Tifli Mohd Talha would be replaced by Aznur Kama Azmir, the group's financial controller for its plantation sector.

"FGV will continue its business as usual," the company said in a filing to the stock exchange.