AUGUST 26 — Everyone loves a good corporate scandal, and Malaysia is no exception to this.
The country’s history is rife with examples in the past and present to keep us reminded on the need for good corporate governance at all levels, as well as how often these frameworks may have overlooked pockets of weaknesses that damage not only the brand, but subsequently investors, shareholders and insanely enough, link back to government.
But in all such cases, resolving issues for the private sector and government linked corporations have always been resolved internally, before being handed over to the relevant authorities and the courts.
As was the case with Perwaja Steel, Maminco, and a huge list of others you can find here so should be the case with Felda Global Ventures.
For any single entity of corporate Malaysia, their board of directors and management once given a mandate from their stakeholders, should be given a chance to manage and settle the internal crisis based on their own internal policies and processes.
At the same time, they have a fixed period before their next Annual General Meeting to be held annually. Thus roughly, companies in crisis tend to have a year or less to get their house in order and to prove that they still have the confidence of their shareholders.
For listed companies, there is no way they can run from having a fiduciary responsibility to settle problems, in the interest of the company, its shareholders and its investors — which might even include their own workers.
It is therefore the duty of management to oversee the performance of the business, and guarantee that the implementation of their business plan enhances the value for shareholders.
That being said, when questions arise regarding the management of projects which are scrutinised by the board of directors, and even put to a vote, the record needs to reflect who is involved, why go for such a project and how it will increase value for the fiduciary benefit of all shareholders.
Thus, when things go awry, there will always be a need to re-examine the framework within a company and find where the loopholes were, even if it is FGV.
After all, any internal investigation must be held in compliance with company policies, impartial adjudication, adherence to good governance and integrity standards, and ensuring fair due process and fair hearing -all of which are a normalcy for any company.
At the same time, it is a fair cop to say that as a listed company, the need to improve their performance and shareholder value in the long term are put in place.
This includes ways in enhancing yields and productivity, overcoming a shortage of foreign labour and of course, divesting from unprofitable investments
In other words, they are going back to the focus on being a main plantation player and going back to its roots to return value, and this will take time, money but most of all, proper governance.
While this is happening, what people don’t understand is this — any losses of shareholder value, will disrupt the recovery of the share price, which in the end means a loss not only for the main shareholders, but also the minority shareholders.
For most companies, it includes members of their staff. For FGV, it will be settlers themselves who have placed their value in the shares. All in all, we are looking at over 100,000 smallholders and their families.
We must, by and large, respect the will of the shareholders, particularly this group within Felda that reinvested their wealth.
Ultimately, whatever is done now to recuperate and better its performance will be to their judgment, which they will voice out during the next AGM.
Therefore, bad publicity and interference will, in the end, create a lose-lose situation akin to a torched field where no one shall reap any profits
But I digress.
We should allow due process to take its course, as we always have by allowing the concept of innocence until proven guilty. Let FGV continue on its path to recovering its share price by doing what it was established to do. We have historically done this with corporate Malaysia many times over.
At the same time, the disciplinary inquiry must be allowed to continue to proceed in a fair and just manner based on company law and its internal strict governance procedures. If it reaches court, so be it.
** This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail Online.
