Tuesday, November 27, 2018

FGV lawsuit should not be an escape route for Isa

"Tak dibuat orang", a top law enforcement officer confided when asked his view of Felda Global Ventures Berhad (FGV) suing its former Chairman, Tan Sri Isa Samad, former CEO, Dato Mohamed Emir Mavani Abdullah, and 13 others including former government representatives in FGV.

Such remark is natural as it will be the first time since the overhaul done on the Company Act in 2016. According to AskLegal.my website, today "you can actually sue directors for breaching their director duties".

The overhaul done under Dato Najib administration seemed to bite him back but it would not have been done by current Prime Minister, Tun Dr Mahathir.

He U-turned to delay the amendment to take out the responsibility of Public Prosecutor from the Attorney General despite Dato Gopal Sri Ram obviously playing the role now.

It is certainly a vindication to finally "Gotcha!" on Emir Mavani. Never convinced with his use of Enterprise Value in acquisition of plantations, including Eagle and United Pontian.

As for Isa Samad, it serve him right for insisting on oil and gas man, Emir as CEO and the conniving move on seasoned planter, the late Tan Sri Sabri Ahmad in 2013. He contributed to BN losing 25 "Felda seats".

For the rest, it is high time Directors be penalised for not carrying out their fiduciary duties said a former corporate player that used to hog the media.

Stakeholders interest

The civil servants that is supposed to represent the government to look into the interest of various stakeholders should be taught a lesson.

He went on to say they have been kow towing to politicians for too long and is the root of corporate systematic failure. It was much at large during Mahathir's first time as PM.

Returning back to the enforcement officer, he is aware there are legitimate cases to charge Isa Samad and many others. Furthermore, past actions on Felda and FGV has resulted in cases charged and is ongoing in court.

In fact, Isa Samad and in our view, Dato Shafie Apdal should have been charged before the general election to show to the public that the then government was serious in fighting corruption and telling the Felda settlers and rural folks in Sabah and Sarawak that the raids is not a show.

Charge but whether guilty or not is the purview of the court. Will not pass judgement on our friends whose among the names.

Apparently, the plan was to charge after the general election. So far, not yet.

Under the new PH government, not only there is no charge done, Lim Guan Eng's case was withdrawn. Mahathir, Lim Kit Siang, AG Chamber and certain top judge are responsible.

The lawsuit by FGV begs several legal questions.

Firstly how in the world FGV could make a case as they may need to prove the wrongdoing first and the investigated cases on Isa, Emir and the rest need to be proven in a court of law first.

Secondly, the lawsuit is on the purchase of Asian Plantation Limited. Presumably, the purchase may have been overvalued. To sue and argue on valuation, it is subjective. Tough to win.

Third, there is a fine line between abusing their fiduciary duty and stupidity. A former top official of MACC used to say that stupidity is not a crime. So, is it liable?

Not sure as to the degree in the burden of proof in civil case vis-a-vis a criminal case but hope it is not an escape route for Isa.

The delay in charging Isa is killing.

The media social speculated that Isa may have cut a deal with PPBM to block Dato Seri Anwar Ibrahim passage to Parliament and he resigned from UMNO to run at the Port Dickson by-election.

Some week ago a reliable intel source claimed there is some truth. So was our hunch and we thought there were two candidates assigned to do so.

Not false hope

This lawsuit better not be a whitewash to provide Isa an escape route. 

The common definition of fiduciary duty is "a legal obligation of one party to act in the best interest of another. The obligated party is typically a fiduciary, that is, someone entrusted with the care of money or property".

According to Wikipedia, "Fiduciary duties in a financial sense exist to ensure that those who manage other people’s money act in their beneficiaries' interests, rather than serving their own interests".

Does the like of goodie person like Tan Sri Sulaiman Mahbob serving his own interest? It maybe hard to believe but if he does not serve the interest of the beneficiary and concerned with not getting kicked out by Isa as done on the late Sabri, it is considered self serving.

In The Edge here, the question was asked whether fiduciary duty is merely false hope. An extract reads below:
"...fiduciary duties are largely behavioural. They affect those with a stewardship role and focus on five key areas:

• Compliance with provisions of the foundation document and applicable laws. This is a key consideration for the institution’s directors, to whom all the normal duty of care considerations for a director in a corporate environment should apply.

• Loyalty, meaning being faithful to the interests of beneficiaries and the purpose of the trust, while being impartial when considering the range of interests of different beneficiaries.

• Prudence and care and the exercise of due diligence in managing the trust, its port-folio of investments and assets, especially in evaluating risks and ensuring appropriate diversification while avoiding undue influence from external parties.

• Controlling administrative and management costs and the management of conflicts of interest.

• Transparency and public accountability in dealing with and reporting to beneficiaries."
FGV lawsuit better not be a case of false hope.

If Directors feel such responsibilities do not commonsurate with the money paid, do not be stupid to take up the offer.

Banyak penjawat awam tinggi  pencen yang bodoh kerana suka sangat jadi Director.

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