Serious fissures in the otherwise solid and invincible armour of the ruling Malay party the United Malays National Organisation (Umno) has appeared recently, and this augurs badly for Prime Minister Najib Razak.
Two days ago, the Felda Global Ventures (FGV) which was set-up by Najib with great fanfare and touted as the world’s second largest IPO (after Facebook), saw a full-blown crisis with the abrupt removal of its president and chief executive officer Zakaria Arshad was directed to go on forced leave.
The crisis is so deep that the Prime Minister Office has decided to step in by appointing Idris Jala as an independent consultant whose mission is to resolve this crisis that is more than a corporate tussle.
The story goes that he was asked to resign, but Zakaria refused to step down, saying he will defend his name in this murky situation.
FGV’s chairman Isa Abdul Samad said an internal investigation into the issue of a delayed payment by an Afghan company to an FGV subsidiary is underway.
However, Zakaria said he had called upon the Malaysian Anti-Corruption Agency (MACC) to investigate the entire FGV instead.
The conflict between the chairman and the frozen ceo revolves around an Afghan deal by one of the subsidiaries of FGV, a deal signed before Zakaria took office last year.
Zakaria told the media that he had urged FGV not to go through several deals but his requests were turned down.
Now, accused of corrupt practices and booted out of his office, Zakaria is reverting to Twitter to vent his frustration.
But behind flurry of accusations and denials, there is a deeper consequence to the Umno and Najib that is playing out in this conflict.
FGV has simply not lived to the expectations among the Felda settlers who contributed to the company in many ways.
Felda is a very sensitive issue for the Umno, as it remains its major voter bank in peninsular Malaysia but according to Aliran, an NGO with affinities with the opposition, the Felda constituencies now offer new opportunities to the Pakatan Harapan.
With the coming general election, the opposition could exploit Felda’s mounting financial problems coupled with the Barisan Nasional’s more limited resources, said Aliran.
It would seem that all is not well at the FGV, with many die-hard followers of the Umno facing an imminent crisis due to their waning investment in the company’s stocks on Bursa Malaysia.
Aliran, in February, said the new Felda head (Zakaria) apparently wanted to know where a balance of RM3.5 billion had gone after its listing in 2012.
With a market capitalisation of RM10.5 billion. FGV’s shares rocketed from its initial price of RM4.55 to as high as RM5.50.
But after the forced removal of Zakaria, it plummeted to a five-year low, down to RM1.60 per share only to recover to RM1.66 on Wednesday.
It is well known that Felda settlers, who are land-owners in the Felda settlements, constitute the majority of voters in at least 54 parliamentary seats in Malaysia.
The settlers own shares in FGV, which they bought when the company was at its height with a higher stock market value.
On its listing on Bursa Malaysia, it raised over US$3 billion in one of the world’s biggest listings of 2012.
Since then, the shares have dropped 70 percent, but both the Umno and the Prime Minister has chosen not to speak about these issues, hoping things will get better soon.
However, the settlers, suffering from the losses they incurred in the FGV have many other complaints and they are now listening to former Prime Minister Mahathir Mohamad and his party the Bersatu.
Political rallies and speeches are banned in Felda settlements but Mahathir managed to hold a few of talks in the settlements, gathering massive crowds despite warnings from settlement chiefs of consequences to the settlers if they attended or organised such meetings.
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