This article first appeared in The Edge Malaysia Weekly on June 10, 2024 - June 16, 2024

According to the website of Boustead Plantations Bhd (BPlant), its new CEO is Datuk Zulkarnain Md Eusope, former CEO of sister company Pharmaniaga Bhd (KL:PHARMA) who left the pharmaceutical concessionaire in March last year, a month after it fell into the cash-strapped Practice Note 17 (PN17) category.

Pharmaniaga tumbled into PN17, following a massive impairment of RM552.3 million, after overstocking and failing to offload Covid-19 vaccines. The impairment caused Pharmaniaga to bleed a quarterly net loss of RM664.39 million for its fourth quarter ended December 2022.

Zulkarnain’s departure in March 2023 was abrupt and, while Pharmaniaga’s announcement of his leaving was stated as to “pursue other interests”, the consensus was that he was taking responsibility for the impairment.

Now, Zulkarnain’s appointment to helm BPlant raises questions, especially considering Pharmaniaga is 54.9%-controlled by the Armed Forces Fund Board (LTAT). LTAT, via its flagship Boustead Holdings Bhd, wholly owns BPlant.

Him being back with the LTAT group at BPlant suggests he has nothing to do with what happened at Pharmaniaga. If this is the case,  who is responsible for the mess that caused the company to incur such huge losses?

In early January this year, questions were also raised when Pharmaniaga, with its PN17 status, secured a new seven-year concession agreement from the Ministry of Health for the supply of medical logistics services.

So, if Pharmaniaga and, now, Zulkarnain are not to be held accountable for the huge losses at Pharmaniaga, who is?

Pharmaniaga’s stock, which averaged 62 sen in 2022, shed more than 50% of its value in February 2023, plunging from 52 sen to 25 sen in a matter of days, prior to the announcement of the huge impairment.

Its share price, which closed at 38.5 sen last Friday, for a market capitalisation of RM554.9 million, has yet to recover from the incident.

The only losers in the entire debacle seem to be Pharmaniaga’s minority shareholders.

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's App Store and Android's Google Play.