Dungeons and Dragons

fgv

That would be the horrid fear of ordinary folks in the medieval times. However, it modern times the honour goes ‘Discounts and Governance’. Ordinary people, are stakeholders for corporations and the stewards have the fiduciary duty and entrusted to uphold the interest of their organisation.

In January earlier this year, Emir Mavani appointed as CEO Designate of FELDA Global Ventures Holdings Bhd (FGV) and helmed the responsibility for international business operations which amongst other things included the trading and marketing function of FGV (under Felda Marketing Services Sdn Bhd) .

Felda Marketing Services Sdn Bhd’s main function is to market and sell FGV’s Crude Palm Oil, as well as other palm oil derivatives such as palm olein.

Felda IFFCO Sdn Bhd is 50% owned JV company between FGV and an Indian company Allana family based in Dubai, UAE. The management is by the Allana family. Since the inception of the JV with them, the said company has been continuously losing money.

It is believed sometime in April 2013, Emir Mavani unilaterally approved an RM100 ringgit per ton discount (to market) of Crude Palm Oil to Felda IFFCO Sdn Bhd (FISB) for 40,000 tons per month for 12 months, ostensibly to support FISB and Felda IFFCO Oils Products Sdn Bhd’s packed products business.

Letter from CEO FELMA was issued to CEO IFFCO Syed Ridzwan Ahmed about the agreement between Mavani and Ridzwan on the discount around the same time.

Screen Shot 2013-09-30 at 12.42.44 AM

At 40,000 tons at RM100.00 discount per ton for 12 months translates to RM48 million per annum. That is RM48million less income to FGV. That is not as interesting as the authority of the FGV Group President CEO has a discretionary limit of approval for only RM1 million.

For the record, Mavani only assumed the position of FGV Group President and CEO on 15 July 2013.

It is also believed that no approval from BoD of FGV was sought for the aforementioned discount even though the impact to the company was well beyond the Group President/CEO’s limit of RM 1 million, what more the CEO designate who unilaterally approved this discount.

Since the discount takes effect in late April, there has been 72,000 tons sold to FISB and FIOP. Which would amount to RM7.2million of unsanctioned company expenditure/discount.

Essentially the RM48 million per annum which accounts for 480,000 tons of CPO or 15% of FGV’s total CPO sales is a subsidy to Felda IFFCO since they control the management of the companies and sell through their own sales channels.

It is also believed that FGV Chairman Tan Sri Isa Samad has been informed about this. However, he is nonchalant about it.

What is more interesting, it is believed that there is an active MACC investigation on the matter since three weeks ago. Yet, Isa as the FGV Chairman did not do anything at BoD to rectify the matter. The very least, get Mavani to explain to the BoD on the matter.

Screenshot of Yunnan Huijia Co. Ltd's website

Screenshot of Yunnan Huijia Co. Ltd’s website

Added to that fact, this is not the first time Mavani gave away discounts. The pig rearer Yunnan Huijia Ltd. of Kunming China was a scandal raised earlier. It was even raised by shareholders on the 26 June 2013 first FGV AGM. However, it does not show that Isa reprimanded nor made Mavani answer to the discount scandals so far.

There are issues of governance in these instances. Addendum to the the recent acquisitions made, at exorbitant prices.

Published in: on September 30, 2013 at 09:30  Comments (9)  

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9 CommentsLeave a comment

  1. Since IFFCO took over 50% over FELDA refineries (except Delima Oil), all palm oil products for export market must use IFFCO brand only (HAYAT, NOOR, etc), making FELDA brand like SAFI relatively unknown in the international market. Not only IFFCO is screwing FELDA on pricing and payment term, but they also control the palm oil brand. Yang tanam pokok kelapa sawit ialah orang melayu, yang kaya raya jual minyak serata dunia ialah orang keling dubai india mari. Mampus kita.

    • Ini suatu perbuatan rasuah jika keling Pradeep Kumar melebihi kuasa kelulusan.
      SPRM perlu bertindak sebelum banyak lagi duit orang Melayu Felda di curi oleh Keling Pradeep Kumar ni.

  2. Unless it is in the Company’s Policy not to invest in Companies that are involved in Non Halal Products or Activities there is no Reason why a Listed Company like FGV should not invest in Profit making Products or Conpanies regardless of whether it markets Non Halal Products or Services. Also Once you are Listed, your Shareholders may Comprise of Pig Farmers or Drug Dealers or Gambling Entities.

    There are Non Listed Christian and Jewish Institutions in the US that do not invest in Non Halal Companies or Products. It is very much up to the Management. But restricting Public shareholders to the kosher type is an impossibility.

    Perhaps they should have thought about all these before going Listing!

  3. MACC tolong la siasat. IFFCO dah lama bermaharajalela

    di FELDA tapi dibiarkan saja

    org melayu tgk saja

    tapi di sana sini melaung laung berjuang utk
    masa depan melayu

  4. This former cikgu sekolah Isa is unfit to be Chairman of FGV. He know nuts in stemming the cheating, corruption and leakage by Emir Mavani.

    This is only chicken feed. Bet he is raking in billions in kickback and commission.

    Isa is there only for political purpose. Even so, his performance at Jempol failed. An unknown in politics and only a pop singer could rake in significant votes.

    Isa cany be non chalant for only one reason. Either he is stupid or he has a cut. He may be short but his hands can be extended.

  5. Dah malas nak cerita pasal fgv dgn iffco. dah lima tahun sama tak pernah bagi dividen pd fgv / felda. cpo nak premium dan discount tapi tak pernah buat untung. apa guna sprm di fgv. dulu di sprm pskai crv bila masuk fgv pakai merz 250. perkara macam ni dah tak nampak. betul felda jadi lembu.

  6. Err something does not add up.

    What is the terms of the pricing. Is it RM 100 off the spot price of CPO, or is it RM 100 a fixed price? That makes a lot of difference since the price of CPO is volatile. If its RM 100 off a fixed price then Iffco has entered into a commodity swap i.e paying fixed and receiving floating (i.e. the market price of CPO). Depends whether the market is backwardation or in contango. From what the backwardation in CPO was quite small, and perhaps it may have swung into contago.

    But as you have said, Iffco was a perpetual loss making entity. It was first a JV between FHB and Iffco, and later on the JV stake was sold to FGV. I think the entire investment should have been impaired or written down.

    Which leads one to think, why was the listing rushed if there were so much holes in the biz structure?

    A point to ponder

  7. Iffco is a company based in Dubai owned by Allana family.Prior to Jv arrangement with Iffco,all the 12 felda refinaries were losing money.The discount of $100 per ton was given by Felda to these refinaried even before they have a JV with Iffco.Felda have more than
    12 refinaries and all of them getting $ 100 rgt discount per ton.
    Your calculation of 48000 tons being subsidise including oil send to felda refinaries that they owned 100%.

    While other Felda refinaries are still losing money despite getting $100 rgt discount ,all JV refinaried with Iffco making good profit.

    The benefit the Iffco JV brought to Felda oil are many.Iffco,on his owned effort manage to panatrated market like Turkey,Egypt,Iran and north Afica for refine palm oil.Iffco also having their own refinaried in Egypt,Turkey,Pakistan,and Dubai.
    They are one of the biggest buyer for crude palm oil from Felda.

    Salam.
    Mohd Catic.
    IFFCO adviser

    • Good if what you say is true.

      But you write under the name of Nora. You signed off as Mohd Catic. How to believe you?


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