Felda to embark on group-wide structural reform

Felda is facing serious cash flow problems while LTH has gone into investments that face huge impairments. Both entities would need to divest assets and the easiest is to look at the listed companies,

PETALING JAYA: The Federal Land Development Authority (Felda) will initiate group-wide structural reform to raise the level of professionalism based on the highest standards of corporate governance as part of the several short-term measures that have been identified to improve accountability and integrity within the government-linked company.

The appointment of its management team will also be made up of professionals of credible stature and free of political interference to ensure that management is transparent and responsive, the Felda White Paper said.

To avoid conflicts of interest in decision-making that would be made by the board of directors within the Felda group of companies, there must be a separation between the chairman of Felda and the chairmanship of the other Felda subsidiaries.

Accordingly, the appointment of the chairman of Felda, FGV Holdings Bhd and Felda Investment Corp Sdn Bhd (FIC) is to be from the circle of professionals and not based on political influence.

These are among several short-term measures the government has identified to improve accountability and integrity within Felda to ensure public confidence and trust from the public.

To improve corporate governance of companies under the Felda umbrella, a management audit will be undertaken to raise the efficiency and effectiveness of its management and staff.

It will also establish an investigation committee to execute the recommendations proposed by the forensic audit report.

Besides this, it will improve the standard operating procedure to ensure accountability in the running of Felda, as well as study the amendment of acts/regulations in line with the new Felda business model.

For a better and lean management structure, the report said that Felda would initiate strategies such as right-sizing, eliminating department and company overlaps and undertaking a business process re-engineering.

Towards this end, a management team of high calibre and professionalism, plus one free from political influence will head the Felda Group, the report said.