June 8, 2017 / 4:46 AM / 3 years ago

Malaysian corruption investigators search Felda Global's head office

KUALA LUMPUR (Reuters) - Malaysian investigators spent nearly eight hours at the headquarters of Felda Global Ventures Holdings (FGV) on Thursday, collecting documents and interviewing company officials following allegations of corruption and abuse of power at the world’s third-largest palm oil operator.

Policemen escort a trolley of documents seized by the Malaysian Anti-Corruption Commission at the Felda Global Ventures Holdings headquarters, in Malaysia's capital Kuala Lumpur June 8, 2017. REUTERS/Emily Chow

The Malaysian Anti-Corruption Commission (MACC) is looking into several officials at FGV, following the suspension of the firm’s chief executive officer, chief financial officer and two other executives earlier this week.

An FGV source said MACC investigators visited various offices in the building, including the legal, finance, procurement and supplier departments, but was not able to provide details on which company officials were interviewed.

The investigators declined to comment on their way out of the building.

An MACC spokesman had said earlier on Thursday that the agency was at FGV’s offices in Kuala Lumpur “to collect supporting documents” following a meeting with FGV Chief Executive Zakaria Arshad on Wednesday.

The investigators could seize laptops and computers as well, he said, declining to give details on what was discussed with Zakaria.

The FGV crisis unfolded on Tuesday when a letter was leaked from Zakaria to Chairman Mohd Isa Abdul Samad in which he refused to step down as instructed by the chairman.

FGV’s board then suspended Zakaria and three others. The CEO has denied wrongdoing and called on MACC to conduct its own investigation into FGV, but did not provide any details.

Speaking to reporters on Thursday, Isa said he was willing to meet the anti-corruption investigators if asked. He added that FGV was continuing its own investigation into transactions at a subsidiary that led to the suspensions of the FGV executives.

The FGV board has said a deal with Dubai-based palm oil buyer Safitex was at the heart of the company’s internal investigation and Safitex owes an FGV unit about $11.7 million (£9 million) as of 2016.

Isa was a former chief minister of Negeri Sembilan state and a former vice-president of Malaysia’s ruling party, the United Malays National Organisation.


Malaysian Prime Minister Najib Razak’s office stepped into the boardroom spat on Wednesday, asking a former cabinet minister to look into the suspension of FGV’s top executives.

Turmoil at FGV — whose biggest shareholder is the state-owned Federal Land Development Authority (Felda) — could hurt Najib, who government sources say is expected to call elections later this year. FGV’s shareholders, many of them small landowners, form a key vote bank for Najib’s ruling alliance in battleground states.

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Felda “settlers”, or land owners, are the majority voters in at least 54 of the 222 seats in the parliament. They own shares in FGV, which raised over $3 billion in one of the world’s biggest listings of 2012.

The shares have dropped 70 percent since that stock market launch, hurting settlers. They have also complained about delayed payments from Felda, which buys the palm fruit the settlers produce in their land.

FGV’s shares fell 0.6 percent on Thursday to 1.65 ringgit per share, valuing the company at 5.91 billion ringgit (£1 billion). The shares have lost about 6 percent of their value since Tuesday’s suspension of the top executives.

Writing by A. Ananthalakshmi; Editing by Bill Tarrant, Greg Mahlich

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