Analysts: Business as usual at FGV despite management change

The move was following the Notice of Inquiry which was issued to the group president/chief executive officer following the conclusion of internal investigations into 10 critical issues.

KUCHING: Analysts are neutral on stocks of FGV Holdings Bhd (FGV) in spite of the suspension its group president/chief executive officer effective September 13, pending further notification by its board of directors.

Researchers with MIDF Amanah Investment Bank Bhd (MIDF Research) gathered that the move was following the Notice of Inquiry which was issued to the group president/chief executive officer following the conclusion of internal investigations into 10 critical issues.

It was mentioned in the announcement that each of these issues has resulted in financial loss for FGV and its shareholders.

“FGV explained that the Special Board Committee 2 will take over the group president and CEO responsibilities. The members of the committee are four FGV directors – Datuk Dr Salmiah Ahmad, Dr Mohamed Nazeeb P Alithambi, Datin Hoi Lai Ping and chairman Datuk Wira Azhar Abdul Hamid.

“We are neutral on the news. It is not entirely a surprise as FGV has announced that it was investigating several of its business practices,” it said, adding that this is due to “adverse findings” from an earlier probe into its investments.

In MIDF Research’s view, FGV’s operation should not be affected and hence maintained its FY18 core net loss forecast of RM72.7 million.

“We expect earnings improvement in FY19 with core net profit forecast of RM73.7 million – unchanged from previous estimate.

“We also maintain neutral with a target price of of RM1.54 per share.”

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