FGV has referred the cases of suspended group president Datuk Zakaria Arshad and group chief financial officer Ahmad Tifli Mohd Talha to a domestic inquiry panel.
KUALA LUMPUR: CIMB Equities Research has raised the target price of Felda Global Ventures Holdings Bhd (FGV) to RM1.80 and upgraded it from Reduce to Hold following the latest development in the plantation giant.
FGV announced that Datuk Zakaria Arshad, its group president and CEO will resume his duties on Oct 16, after being on leave of absence since June 6.
CIMB Research had on Tuesday raised the target price as it rolled forward its valuations to end-2018 and reduce the discount accorded to its sum-of-parts estimate from 25% to 20% to reflect the resolution to its management issue.
“In line with this, we raise the stock from Reduce to Hold as we expect FGV's share price to be supported by its plans to improve yields and by the sale of its non-core businesses,” it said.
To recap, FGV's board said a domestic inquiry (DI) has been carried out with proper internal processes consistent with Minister of Finance’s (MoF) requirements.
The findings of the DI were submitted to the MoF, which has taken time to review them before making its final decision.
After taking into consideration the ongoing transformation at FGV, and the group president and CEO's commitment and assurance to resolve the long outstanding debt of Safitex Trading LLC, the MoF has decided that it would like Zakaria to return.
On Sept 8, Datuk Wira Azhar Abdul Hamid was appointed as the chairman of FGV. He was previously Group MD of Malakoff, chairman of Tradewinds Corporation, president/ group MD of Tradewinds, CEO of Mass Rapid Transit Corporation, Group CEO of Pernas International Holdings Berhad, and held various key positions within the Sime Darby Group.
The appointment of Datuk Azhar was followed by the announcement that FGV’s CFO Ahmad Tifli will resume his duty effective Oct 4, 2017.
“We are positive on this news as it will allow FGV to continue with its 2020 Strategic Plan to revive its performance.
“This is in line with its chairman's commitment to turn the group around. However, the chairman has also mentioned that there is a need for a new management structure to strengthen the organisation and the board's composition could be enhanced with the appointments of experts in related subject matters,” said CIMB Research.
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