September 13, 2018 / 9:14 AM / 8 months ago

Malaysian palm producer FGV suspends chief executive after internal probe

KUALA LUMPUR, Sept 13 (Reuters) - Malaysia’s FGV Holdings , the world’s largest producer of palm oil, suspended its chief executive, Zakaria Arshad, with immediate effect after wrapping up an internal investigation, the company said on Thursday.

In a stock exchange statement, FGV’s board of directors said it had served an inquiry notice on Zakaria and his “powers and authorities” had been suspended until further notice.

“FGV will continue its business as usual,” it said, adding that four directors, including chairman Wira Azhar Abdul Hamid, would “take over the responsibilities to perform the functions” of the chief executive.

Zakaria did not immediately respond to telephone calls and text messages from Reuters to seek comment.

In late August, FGV had said it was investigating several of its business practices following “adverse findings” from an earlier investigation into its investments.

Last week, Chairman Wira Azhar told a news conference the company was investigating some members of its board and management in an inquiry into its business practices, but he did not identify the individuals concerned.

Earlier on Thursday, speaking at a press event, Zakaria had dismissed assertions that he had been asked to resign as chief executive, following Tuesday’s announcement by FGV that he would no longer be a company director.

Malaysia’s finance ministry, which has a golden share in FGV, on Wednesday withdrew its nomination of Zakaria as a company director, FGV said in an exchange filing.

Zakaria said the decision was the culmination of discussions on whether FGV board members should be separate from its management staff.

“We decided to take the approach of separating the board from the management. So as part of management, I will no longer be part of the board,” Zakaria said, adding that the finance ministry’s decision had been a result of the separation.

“There are stories and speculation of me being asked to resign as CEO, those are not true. I am no longer a board member of FGV, and that is the story.”

Before trading in FGV was suspended, its shares jumped 3.4 percent on Thursday afternoon, outperforming a rise of 0.4 percent in the benchmark index.

The shares have lost nearly 70 percent since an initial public offering in 2012, hit by investor and analyst allegations of poor management.

Zakaria and his chief financial officer were suspended for four months last year as the company investigated transactions at a subsidiary. (Reporting by Emily Chow; Editing by Clarence Fernandez)

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