KUALA LUMPUR (Reuters) - Malaysian palm oil producer FGV Holdings is investigating some members of the company’s board and management as part of a probe into its business practices, FGV’s chairman said on Monday.
Speaking at a press conference in Kuala Lumpur, chairman Wira Azhar Abdul Hamid said the individuals being investigated “range from board members to management employees” and included previous board members.
“In the areas (of investigation) we are undertaking... They have to answer on what went wrong or what policies were not complied with,” said Wira Azhar.
He did not identify the individuals under investigation.
FGV said last week it had begun an internal investigation of its business practices following “adverse findings” from an earlier probe into the acquisition of a palm plantation company, a condominium property and other investments.
The internal investigation involved examining open credit lines, poor purchasing trading practices and palm oil sales, direct awards of procurement contracts that breached best practices, and a shortage of workers that resulted in financial losses, the company said.
FGV, the world’s largest producer of crude palm oil, reported a net loss for the quarter ended June 30. It cited lower productivity, weaker average crude palm oil prices, higher production costs and higher losses from joint ventures and associate companies.
Wira Azhar said on Monday FGV aimed to enhance its operational effectiveness and is targeting higher crude palm oil (CPO) production from improved fresh fruit bunch (FFB) yields.
FGV is aiming for CPO output of 3.4 million tonnes in 2019, up from a target of 3 million tonnes this year, while yields are expected to rise to 20 tonnes per hectare from 17 tonnes.
FGV shares were 1.3 percent lower in afternoon trade on Monday, underperforming the benchmark index which was down 0.2 percent. It’s shares have lost over 70 percent since an initial public offering in 2012.
The company, formerly known as Felda Global Ventures Holdings, has been dogged by allegations of graft and poor company management.
A new government elected in May has pledged to clean up the governance and operations of state-linked entities, including state plantation agency Federal Land Development Authority (Felda), FGV’s largest shareholder.
Reporting by Emily Chow; Editing by Darren Schuettler