The world's largest palm oil producer, Felda Global Ventures (FGV), said yesterday its chairman, Tan Sri Mohd Isa Samad has resigned, amid allegations of corruption and violation of corporate governance.
The government, which has the biggest stake in FGV, said Mr Isa will now be acting chairman at a government agency, the Land Transport Public Commission (Spad). The agency regulates taxis, public buses and trains.
The swift resignation by Mr Isa from FGV - just two weeks after his bitter dispute with the firm's management was blown open - came after the government promised to resolve the matter quickly. Most of FGV's small shareholders are Malays who are staunch Umno voters and live in rural constituencies.
FGV yesterday said it has appointed board member Sulaiman Mahbob, a senior civil servant, as acting chairman.
When asked by reporters yesterday, Malaysian Prime Minister Najib Razak said: "Isa voluntarily agreed to relinquish his position as FGV chairman. In appreciation of Isa's role, I agreed to appoint him the acting Spad chairman."
FGV, which listed in 2012, has since seen its shares decline 60 per cent, while core losses last year totalled RM157 million (S$51 million).
Malaysia's Federal Land Development Authority, or Felda, is the single largest shareholder in FGV with a 34 per cent stake.
FGV's other shareholders include tens of thousands of settlers on Felda land whose multi-generational families - totalling 1.2 million people - form a large vote bank for Umno in 54 federal constituencies out of the 222 parliamentary seats.
Mr Isa was also chairman of Felda until January.
A government audit last year found that Felda invested in dubious projects under Mr Isa, who was appointed to the post in 2011. These included forays into data management, broadband Internet and sturgeon farming, which collectively lost more than RM100 million.
"Isa has made a mess out of FGV and, earlier, Felda," said opposition lawmaker Liew Chin Tong, adding that "(Isa) should not be rewarded with such an important position in SPAD, which could further erode public confidence towards the government".
The troubles at FGV stem from a dispute between Mr Isa and its suspended chief executive, Datuk Zakaria Arshad, over purported violation of corporate governance from a missed payment by an Afghan firm.
Mr Zakaria denied any wrongdoing and instead accused the FGV board led by Mr Isa of approving ridiculous deals. FGV has denied Mr Zakaria's allegations.
Malaysia's Prime Minister's Office said yesterday that its probe into FGV found cause for "disciplinary proceedings" against Mr Zakaria and three other executives.