This article first appeared in The Edge Malaysia Weekly on November 25, 2024 - December 1, 2024

Last week, Zelan Bhd (KL:ZELAN) CEO Mohd Ariff Abd Samat called it quits after just three months in the job, saying he was leaving to pursue other career opportunities.

However, when a top executive steps down so soon after the appointment, it raises many questions. For one, it does not reflect well on the company, which had sought to fill the CEO position for more than a year.

Zelan has gained a reputation for being unable to retain its top executive as this is not the first time it has had to navigate the loss of its CEO. In June last year, it terminated the contract of its then CEO Hazimi Baharum but did not give a reason for the termination.

However, a month before Hazimi’s termination, the company had slipped into Bursa Malaysia’s Practice Note 17 status for financially distressed companies after its external auditor Nexia SSY PLT expressed a disclaimer of opinion over the company’s audited financial statements for the financial year ended Dec 31, 2022. Nexia had flagged that an intercompany balance difference, amounting to RM30.789 million between receivables and payables, was unreconciled in the financial statements, as well as the recoverability of receivables amounting to RM241.8 million.

So, did Mohd Ariff leave his role because he was not the right fit? Still, appointing him as the CEO did not work out as planned even though Zelan’s filing with Bursa at the time showed that before stepping into the role in August, he had held key positions in internal audit, accounts and reporting and business planning and budgeting in the oil and energy industry over the last 18 years.

In the meantime, the company has sought a second extension of time until July 31, 2025, to submit its regularisation plan following the latest setback. It remains to be seen how it plans to regularise its financial condition. For now at least, it has an acting CEO to steer the ship.

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