KUALA LUMPUR: It is business as usual for FGV Holdings Bhd despite the suspension of group president and chief executive officer (CEO) Datuk Zakaria Arshad, MIDF Research said.
“In our view, the company’s operation should not be affected,” the research firm said in a note.
The news is not entirely a surprise as FGV has announced that it was investigating several of its business practices, it added.
FGV announced that the company has suspended Zakaria’s authorities effective September 13, pending further notification by the board.
The research house said the move was following the Notice of Inquiry which has been issued to the CEO following the conclusion of internal investigations into 10 critical issues.
MIDF Research said this is due to "adverse findings" from an earlier probe into its investments.
MIDF Research maintained its FY18 core net loss forecast of RM72.7 million.
“We expect earnings improvement in FY19 with core net profit forecast of RM73.7 million,” it added.
FGV said the Special Board Committee 2 (SBC2) will take over the CEO responsibilities.
The members of the SBC2 are four FGV directors namely chairman Datuk Wira Azhar Abdul Hamid, Datuk Dr. Salmiah Ahmad, Dr. Mohamed Nazeeb P. Alithambi and Datin Hoi Lai Ping.
It was mentioned in the announcement that each of these issues has resulted in financial loss for FGV and its shareholders.
The suspension of Zakaria seemed to have little impact on the companies’ shares.
Despite falling as much as 1.94 per cent before noon yesterday, the shares gained strength in the afternoon to rise above its last price of RM1.54 on Thursday to hit its intraday high of RM1.55.
Related shares namely Sime Darby Plantation Bhd, IOI Corp Bhd and United Plantations Bhd on the other hand rose above the key benchmark index, FTSE Bursa Malaysia KLCI (FBM KLCI).
FBM KLCI rose 0.62 per cent to 1,803.76 points from 1,792.60 points on Thursday.