MIDF Research is positive on Zakaria’s return to FGV
In a research report today, MIDF said the news reflects certainty on the direction of the company which is likely to be viewed positively by the market.
It said FGV chairman Datuk Wira Azhar Abdul Hamid has also highlighted that his priorities are to improve operational and financial performance of the group’s core business and ensure sustainable growth going forward.
On June 6, Zakaria has been given leave of absence pending investigations of certain transactions under Delima Oil Products Sdn Bhd, a subsidiary of FGV.
In a Bursa filing yesterday, FGV said the decision of Zakariato resume his duty was made after the conclusion of the domestic inquiry to ensure proper corporate governance.
“The Special Shareholder, The Minister of Finance (Incorporated) has required that the domestic inquiry on FGV Group President/Chief Executive Officer must be carried out in line with integrity, spirit of impartiality of the ongoing inquiry and ensuring proper corporate governance.
“The DI has been carried out with proper internal processes and the findings of the DI were submitted to the Special Shareholder in line with Article 80, of FGV’s Memorandum and Articles of Association. The Special Shareholder has taken time to review the matter.
“After taking into consideration the ongoing FGV transformation program and the GP/CEO’s commitment and assurance to resolve the long outstanding debt of Safitex Trading LLC, the Special Shareholder would like Datuk Zakaria to return as the president and CEO of FGV,” it said in the filing.
MIDF has maintained its “neutral” stand on FGV with an unchanged target price of RM1.59, based on one time price to book value.
It has also maintained FGV’s earnings estimate for both financial year 2017 and 2018.
“Despite the positive news, we believe that long term rerating catalyst for FGV is the sustainable core earnings,” it said. – AFP