The board is investigating six matters on FGV
KUALA LUMPUR: CGS-CIMB said news of the resignation of FGV Holdings Bhd
president and CEO Datuk Zakaria Arshad was a “slight positive” for FGV as it appears that the matter has ended amicably.
“The resignation of the president /CEO will pave the way for FGV to move forward to identify and appoint a new CEO to drive the turnaround initiatives that its board has conveyed to the investment community earlier,” it said in a note on Wednesday.
The research house noted that Datuk Zakaria’s contract as the group’s President/CEO would have ended in March 2019 if he had not resigned.
The Board of Directors of FGV Holdings announced Zakaria’s resignation on Wednesday, ending the suspension imposed on him on Sept 13, 2018.
However, forensic investigation on alleged irregularities in the group's past investments will continue, and is expected to be concluded by year-end.
“Although this is a slight positive, we do not expect FGV's share price to re-rate given the short-term uncertainty relating to FGV’s leadership.
“This, coupled with the challenges of low CPO prices and concerns over start-up losses from the group's new sugar refinery in Johor, will likely to limit its share upside in the near term,” it said.
It maintained its Hold call and target price of RM1.67 on the counter.
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