Musa should have taken responsibility and left

 

Musa Hitam: Showing the gesture what needs to be done about the BOD?

Sime Darby Sacked-and-now-sued-former-CEO Dato’ Seri Ahmad Zubir Murshid is striking back. He is saying what where here at BigDogDotCom have said at length before: The Board of Directors (BOD) have to take responsibility of the Qatar Project (QP), Maersk Oil Qatar (MOQ) and Bakun projects.

Saturday March 19, 2011

Ex-CEO: Sime board was in control

By LISA GOH
lisagoh@thestar.com.my

KUALA LUMPUR: Former Sime Darby Bhd chief executive officer Datuk Seri Ahmad Zubir Murshid has lashed out at the Sime group, saying that its main board was collectively responsible over the company’s recent multi-billion ringgit losses.

In his statement of defence filed recently, Ahmad Zubir said that the main board of Sime group had control over the management and was “the ultimate decision-making process of the group.”

“This action (of instituting proceedings against the defendants) constitutes a selective prosecution of the defendants for a collateral purpose and is an abuse of process.

“The decision-making process went through many levels of detailed discussions and approvals which culminated in the approval by the main board of Sime group,” he said.

He said Sime group was at all times apprised of the issues at the divisional level by the supervisory committee, through members of the main board who sat in that committee.

Ahmad Zubir said the supervisory committee – comprising the president, group chief executive and main board members – was always chaired by a board member other than the president and group chief executive.

He added that the international contracting plans were undertaken with the full knowledge and approval of the supervisory committee and the main board.

Last December, Sime Darby Bhd filed a civil suit against Ahmad Zubir and four other former senior personnel for restitution in the sum of at least RM338mil plus general and aggravated damages and other relief.

The group, which has diverse business interests including in plantation, property and energy, had said in a statement that the suit was in connection with its loss-making Qatar Petroleum (QP), Maersk Oil Qatar (MOQ) and marine projects, which amounted to some RM2.1bil in losses.

The other four defendants are former head of the group’s energy and utilities (E&U) division Datuk Mohamad Shukri Baharom, former E&U division chief financial officer Abdul Rahim Ismail, former oil and gas head of E&U division Abdul Kadir Alias and former Sime Darby Engineering Sdn Bhd senior general manager Zaki Othman.

In its statement of claim, Sime Darby had alleged that the five acted as a “decision-making unit” in the energy and utilities division and were responsible for the division’s actions and omissions.

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And the top of the heap is former Deputy Prime Minister Tun Musa Hitam, as the Chairman. He head an extraordinary illustrious BOD which at this time last year, consist of ‘Two Tuns, five Tan Sris and four Dato’s’. Musa is a Non Executive Chairman. However, he behaved like a CEO. He was pushing his way around in management and operational matters.

One instance is that Franki Anthony Dass is made the Executive Vice President of Plantations. Musa bulldozed his way to ensure that Dass got the job the moment that he got Dato’ Azhar Abdul Hamid out of the picture, by “promoting” him to the Acting CEO’s post when it is clear the one-time-failed-politician really did not want the latter for the permanent job. Dass was someone Musa was familiar with when they were still in Guthrie and many in market doubt he could do what Azhar did for Plantations.

In short, Musa wanted to call the shots and made no qualms about that.

He is well remunerated as where he is at the moment. Sources within that Musa in his position, is currently enjoying an aggregate of RM 2 million per annum in his package and all the finer things that he was thought as to ‘have been enjoying his privileges’, such as flying around in Sime Darby leased executive jets.

Musa, has the fiduciary duty as the Chairman of the BOD to protect the interests of the shareholders. If Zubir and the management have been misleading the BOD with lousy or inadequate reporting, then he should have asked the right questions. And yet he did not. For three years, he allowed the management represented by Zubir to report false progress and position of the projects.

All the project failures did not come as a surprise in May 2010, when Musa led a marathon meeting of 13 hours to decide on the sacking of Zubir based on the severity of the Bakun, QP and MOQ projects losses and all the ambiguities that loom around them.The QP and MOQ projects failure were presented here in detail for than two years ago. Mainstream media business paper The Edge also talked about the same scandal. It was all too obvious as Sime Darby was then the laughing stock of the oil and gas fabricators’ ‘market talk’.

And yet Sime Darby under Musa failed to notice the ‘writings on the wall’. If he did notice, definitely he did not do the right moves, like asking the right questions and making queries. Musa as Chairman of BOD also have fiduciary duty to ensure that the BOD Audit Committee to make the necessary querries, especially when the managements’ reporting on these projects were logically inadequate.

Zubir is right. Musa and the BOD have a collective responsibility to the stakeholders, especially the share holders. So many are skeptical what actually could be achieved from taking Zubir and four others to court. If that’s the best solution that Musa and Co. could come up with, then he and them are long overdue to be shown the door, if not literally booted out.

The interest of 8 million Bumiputra ASB and ASN depositors which comprises 53% of Sime Darby’s shareholding is paramount.


 

Published in: on March 20, 2011 at 09:27  Comments (5)  
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