FELDA: GRIB & corporate governance

SEVERAL transformation programmes are being implemented as part of the socio-economic engineering policy that will take the country into developed country status and a high income economy but one thing will not change and that is the role of the government as the facilitator and catalyst. In fact this role will be enhanced with the focus by various agencies to ensure that the objectives of the plans are achieved.


It is thus important to be very clear about the roles and responsibilities of each agency. The listing of Felda Global Ventures Holdings (FGVH) next year is testament to the will of Prime Minister Datuk Seri Mohd. Najib Razak to see to it that the government’s role in business, or Grib, is clear.


In the case of Felda, on the one hand there is its role as a catalytic socio-economic agency and on the other, its businesses which bring in impressive returns. Where the former is the responsibility of conventional employees, the latter will be in the hands of professionals and corporate brains.


The distinction that is clearly drawn will also ensure that there is no overlapping of roles and will eventually help achieve the deliverables.


The separation of responsibilities will also assist the professionals amongst Felda’s second generation (Gaprof) to have a bigger and more strategic role so that the interests of settlers in FGVH via the 35% stake under Koperasi Permodalan Felda (KPF) are protected.


FGVH will also provide them the opportunities in business that come with its position as a multi-national with investments and business interests in several countries.


It is anticipated that the appointments to the many boards within Felda will be given to more professionals, including Felda’s second generation.


KPF will continue as an agency that looks after the investments by members in a way similar to Permodalan Nasional Berhad or Lembaga Tabung Angkatan Tentera. In addition, businesses like Maybank and Sime Darby, where the agencies have invested money, or Affin Bank and Boustead Holdings for investments by LTAT will continue with their functions and repay investors with handsome annual dividends. The crucial part is in allowing these companies to be professionally run and guided by the requirements of accountability and good governance.


When FGVH becomes a PLC, the companies under Felda Holdings Berhad and KPF need not compete against each other. On the contrary their roles and delivery objectives will be restructured for the better.


It is also important that those who sit on the Felda Board focus on the original aims of their appointments. Although no new settlement has been opened, there are the replanting schemes to be looked after, in line with amendments to Felda’s functions made in 1991.


Some of the amendments are:


–To implement land development schemes;


–To promote and implement socio-economic programmes related to agriculture, land settlement, industries, and other commercial undertakings;


–To implement activities which could help modernise the agriculture sector, particularly in terms of production, processing and marketing of produce;


–To guide, counsel, manage and coordinate social activities in the land settlements, in agriculture, industrial and commerce.


The Felda Board should also consider opening an institution of higher learning like a Felda Academy to produce graduates to fill the manpower needs of the agency, especially in plantation and land settlement management.


While everything necessary is being done to make sure that the listing proceeds smoothly, there are attempts to derail it. A police report was lodged on October 10 after Felda chairman Tan Sri Isa Samad was named as KPF chairman, although the appointment is within the powers of the prime minister.


The appointment is one the first steps towards transferring all companies under KPF and FHB to FGVH pre-listing which is scheduled to be completed by December.


It is believed also that some board discussions and correspondence, including matters linked to Isa’s appointed, have been leaked out. This is a very serious matter which must be investigated thoroughly by the police.


That the different roles of Felda as a socio-engineering agency and its commercial interests are being kept separate is indeed the way forward to eventually achieve all the objectives of wanting to add value to the holdings and investments of settlers in particular.


Original post (in Bahasa Malaysia) HERE.



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Jordan MacVay