Sime scandal?

Sime Darby Engineering (SDE) use to make an average of ten percent on their gross profit, it was in fact more than 10%, but it’s hidden somewhere thru their accounting process for obvious reasons. For a turnover of RM400 million, they would easily paid more than RM40 million on taxes alone. That was the time of Dr. Samad Solbai and his team.

This day, SDE profit has plunged to a mere 3% out of a turnover of RM2 billion. SDE accountants are doing the direct opposite: how to show more profits, hide the losses and mitigate further losses. This is the time of Dato’ Shukri, Kadir Alias and a man whose name does not appear anywhere in SDE or even in the company that he represents.

The picture is less than rosy, especially in light of the financial crisis and the current price of oil. Aziz Dawi, from SDE, presented to Minister Of Finance (MOF) and a team of Petronas members, the status of SDE in the next few years after the Kumang Cluster (RM1.8 billion) and the Maersk Oil Qatar (MOQ) project is completed. He is worried of course for his new position and the faith of more than 1000 permanent staff of SDE. The irony of this is what while the meeting is important in charting SDE future. The actual faith of SDE is being decided somewhere outside Malaysia. In Qatar, where the Prime Minister is due to visit with some high level top notch of Sime Darby and especially SDE. The focus is on the Qatar Petroleum (QP) project. Awarded to SDE at a figure close to RM1 billion now it’s facing massive delay and losses to the tune of RM700 million. All earlier reports have missed the name of Qatar Petroleum (QP) against Maersk Oil Qatar (MAQ) as a result of which Sime Darby immediately denied the losses. In the clarification, Sime Darby is right in doing that, because the name of the project is not Maersk Oil Qatar (MOQ) but Qatar Petroleum (QP).

When the project was awarded about a year ago, the sense of euphoria and jubilation was without any end. All other local projects was sideline and take secondary stage. Further jubilation was when MOQ was awarded at a price tag of RM2 billion and the first payment was made to SDE. The cash flow was all positive and blue. Six (6) month Bonus was given to all SDE staff for last year 2008. Not until lately, the mention of QP and MOQ can only be done in secrecy and in very small circle. The QP project is already delayed contractually over a year. There will be losses and penalty but hope is that SDE fulfilled their contract and move on with other new project. No one have a clear clue of the losses and how to manage the project from suffering further losses. The current SDE team in Johor and in Qatar does not have the contractual expertise nor the engineering experience to manage the problem of QP. MOQ problem, is in the procurement with almost RM200 million loss, but yet again the fabrication works will be delayed and extend to offshore. Both Sime Darby and SDE is in state of denial of the problem they are facing. The problem is left to be managed by the General Manager, Mr. Zaki Osman, who frequent traveling up and down of Qatar from Johor Bahru is like his ordinary daily trip from Johor Bahru to Kuala Lumpur. Still keeping his cool, although mentally exhausted when re reaches Johor Bahru, the strain and crack is beginning to shows. He is no superman. The problem is not entirely his doing or his project management team. The main cause of the problem is the relationship SDE have with a company called Real Offshore Installation Co. Sdn. Bhd (ROIC) and the deal marker of the Qatar project a man who will be identified as Mr.Sim.

Kadir Alias (SDE head of oil and gas division) met Mr. Sim when they were in Brook Dockyard in Kuching. Kadir was with Petronas at this time. Mr. Sim was assisting Brookes Dockyard based on commission and project success. He prepared all the bids submission and take a mark up from the project -3%-a small amount – and supply all the labor and sub contractors. The project was small and Petronas is a better client to manage. Mr. Sim was introduced to Dato’ Shukri as the man who put the Qatar deal together. That was the beginning of the “Simetyam Affairs’ – The then GM of SDE at that time was Ahmad Faiza, was politely terminated from his GM office and Mr. Zaki was brought in as General Manager. Not so long after come in Mr. Eric (also from Brookes Dockyard) as the Procurement Manager of SDE.

Mr. Sim operates and owned another outfit called Intraline – a full bumiputra company with Petronas license. His name does not appear in any of the statutory forms 24 or 29. The list of licenses that the company registered in Petronas is athick as a government annual gazette. The faceless but likeable personality move in and out of SDE, Qatar and of course Petronas smoothly, seamlessly and easily with confidents as if he owns them. Despite all the losses and delay suffered by SDE for both QP and MOQ, it is no doubt that the person who benefit the most is Mr. Sim thru commission as well as thru ROIC. This will be denied by SDE and Sime Darby but will be put in lightly by a forensic accountant of PNB.

Is SDE for SALE…? That was the plan, an exit strategy by Mr. Hisham Hamdan, the main man for IJN privatization and Labu Airport. An exec VP Corporate Planning, he is closely link with Kadir Alias. Unfortunately with dwindling profit margin and the financial crisis the exist strategy will have to wait a little longer. There is nowhere to hide the losses of both QP and MOQ other than thru getting new project from Petronas. This is where Kumang Cluster comes in as a “GIFT”. At RM 1.8 billion the “CostPlus” project is a bonus and timely rescue to cover the losses from QP and possibly MOQ. Industry sources agree that is possible with the help of well connected people within Petronas and of course Mr. Sim. At that price, Malaysia Marine and Heavy Engineering (MMHE) have to fabricate 2 platforms for Petronas; Tangga Barat and Kinabalu, TWO for the price of ONE. MMHE smell foul but respected Petronas decisions. SDE further proof their strength and capability by completing 90% of the purchases within days of the signing of the contract. While they struggle in bitter regrets in Qatar the outshine in Kumang Cluster. Mr. Sim and his team organized the public relations to ensure that all is in order with Petronas in as far as SDE is concerned. Cost Plus project is the easiest way to make money – from suppliers to engineers – even where it is lump sum – the margin is in a good margin – Petronas must have been hook wind into this.

The magical illusion remains for as long as there is project – this is where Aziz Dawi in to show to Minister Of Finance (MOF) and Petronas that they need more projects. Especially like that of Kumang – with cost plus. They cannot afford to have a gap in the works. Partly because of the number of staff that carry with all about average pay slip but more importantly to ensure that the losses will not appears in the account of 2010. The place of Sime Darby as an institution of wealth lay between economics and politics. Bernard Esambert , former Rothschild banker, stated: “it is the junction of the state apparatus and the private sector that the possibility of making money are the greatest”. The holding company, Sime Darby, the subsidiary company Sime Darby Engineering had evolved an internal system of both behavior and social connection. There was a code of conduct, social conduct, in business affairs and web of connectedness, not merely on marriage but also on “honor among thief”.

Zamri from SDE is related to the Group Chief Executive Dato’ Seri Ahmad Zubir Mursyid. Kadir through Hisham Hamdan. Further down the line another character appears as Mr. Salam from Duplex who claim close ties with the current Prime Minister, PM ‘Flip-Flop’ Dato’ Seri Abdullah Ahmad Badawi. Mr. Salam is now the new link between Mr. Sim, Kadir and Zamri. It is obvious to see that the next fall guy will be Mr. Zaki. Especially since QP and MOQ is handled by him, it is also not difficult to find a replacement at this point in time.

Published in: on February 5, 2009 at 12:44  Comments (47)  

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47 CommentsLeave a comment

  1. MOF and Jabatan Audit Negara pls do something, seriously. RM700 million losses, huge volume man…!!

  2. I wonder how you tied Mr Sim, a man who is facing bankruptcy with his Intraline company with Sime, a GLC and then go on to win the Petronas and Qatar Petroleum awards. Dude… u better have the prove. Someone is getting ready to slaughter you…

  3. One of the subsidiaries of Sime Darby Engineering Sdn Bhd, Sime Darby Marine Sdn Bhd has just placed an order for second derrick pipelay barge through MLC based on the old pricing, which is way high ie at least 40% higher compare to the current shipbuilding pricing and equipment price. That will make them USD30mil richer.

  4. Currently, Sime Darby Engineering (SDE) has appointed CPC as agent to go hire vessels for MOQ Project in Qatar, instead of going directly to vessels owners around Malaysia & Singapore to secure the vessel. Know why? As i know that SDE has sent out a few Request for Quotation to various vessels owner a few months ago and has completed the evaluation then all of a sudden CPC came into picture.

  5. For CPC, u need to look for Zamri, Kadir & Mazhazmi

  6. Please post a question to SDE management on why the person who underbid QP Project’s platforms modification work ie left out 15 platforms in the bid and still be appointed as country manager in Qatar?

  7. Apparently that the newly appointed snr project manager that replace the Mat Salleh Snr PM is on the move, asking vendors, subcontractors, vessels owner for kickbacks.

    He is Zaki’s man while the rest are Kadir’s men, looks like a few pact of wolves are in action.

  8. how can the trusted person appointed by an organization and known as the project manager stoop so low and only think about what he can put into his pocket. this is disgusting and you wonder why Malaysians are well known for kickbacks… it all starts from here and then they progress on and on.. from RM 10 to RM 10,000,000 and they dont stop one… mana boleh.. makin besar periuk, makin besar la kerak… duit rasuah bagi anak bini makan, lagi baguih pi mampuih…

    This bloody weasels, blood sucking lice shall be brought to justice, either by SDE or by law!!!

  9. SDE will not take action, they are all the same…Ular besar makan gajah, ular kecik makan ayam.

    Look at the agreement posted on Sime Darby Watch, the person who is siphoning the money is no other than Sukri (MD of SDE), Kadir (Head Of Oil & Gas)

  10. we should ensure that such comments of this magnitude and precision is also seen and read in SIMEDARBYWATCH blog site. we need to bring all these corrupted figures down!!!!

  11. I just heard that Kadir and Shukri are counting their last day now. End of January 2010? What happen to Zamri and Zaki?
    MACC please come and investigate any possible irregularities in SDE including about the contract award to supply services for all the projects. Somebody might have beaten the fool proof system.

  12. The derrick lay barge with 1600t crane ordered by SDM and built by MLC is fuck up design. Till now the barge laid up at Wison Yard. Built to cater MOQ project but finally SDM screwed by former SDM staff Mazhazmi & MLC. The barge could not lay paip as desired & crane got problem with anti heeling system.
    Now SIME become laughing stock to O&G world

  13. The problem with SDE is that only few people can make decison and there are still clown and leeches are still around. Tell me which international projects that SDE can be proud with? What about the current ONGC job? I am pretty doubt on its success financially. For any projects, T&C from the client is accepted without many contention and always in the expense of SDE advantage.

  14. Congratulation to Azmi Abu Samah for the new appointment as GM PMO (hope this is not a cold storage post to him). He has some sense of efficiency in his work and sometime his action in resolving a crucial situation is unpredictable as he disguises along the line of his smartness. I don’t blame him for the blunder about QP as the root causes of the losses came from people having more authority than him. Made him SDE’s SGM may spearhead a trailblazer in exiting from the current messes.

  15. […] This is the second major blunder SDE is facing, with regards to really huge losses. First that struck attention was the RM 800 million losses in the scandalous Qatar project. […]

  16. […] ps.. BigDog has been writing about the Qatar scandals since early February 2009, more than a year ago. today we found out that it was indeed true! check it out here. […]

  17. Yes you are right. No matter how meticuluos the losses have been covered over the years in the ledger, it will eventually be unveiled sooner or later. When Adnan had been “sacked”, then followed by Syukri and now DS Zubir, the real jokers who are still kicking and alive in SDE won’t be spared I guess. They are the one pursuade the top gun to agree with their very ambitious plan. What about small and medium fryers who benefitted a lot behind all these jokers? Let see the Deja Vue of the dream from BigDog one year ago.

  18. ada sabotaje ke …..satu ke satu kompeni melayu/glc sakit….

  19. […] absence”, which took affect immediately. This was a decisive move, especially after a lot of Sime Darby’s scandals were being highlighted here in bloggosphere more that 15 months […]

  20. Why Ahmad Zubir only the fall guy….the whole Energy & Utility management should be sacked….kadir & Zamri should be sacked as well. Both of you like to keep problems under the carpet and now every thing are out…in Oct 2009 I predicted Sukri,Kadir,Zamri and Datuk Zubir will be sacked….and now 2 already down and remain another 2.
    Energy & Utility management knew all the problems since early 2009 but keeping it under the carpet.

    Because your incompetency ….many inorcent effected.
    Sime gave you BMW so that your deliverable equivelant that car….but your capability just 1986 proton saga with magma engine….what a pitty.

  21. I welcome the decision to made Datuk Azhar Hamid as acting CEO as he is another breed used to be groomed by Datuk Syed Tamin many years back. Syed Tamin used to be director in charge for Sime Sembawang (SDE) way back in 1998 to 2000 and Azhar was his resident officer to make sure SDE would be run in right path. Saiful Anas was another of Syed Tamin person in-charge as project accountant at that time. One thing that I praise Syed Tamin and Azhar are because they trust the current internal resources (I call it as SDE Aborigin for those working with SDE since the inception of SDE since mid 80s) to work with them. People like Madzlan and Yusof Rahim were among the managers that they like most not due to their name but on the aspect of efficiency, couregeous, farsightedness,problem solver etc. Unfortunately, Syed Tamin was replaced by JC around early of millaneum. They are not wrong about identifying good managers. Unlike them, when Datuk Syukri took over from JC, he didn’t really trust the “Aborigin” from SDE then Adnan and Kadir was handpicked to restructure SDE toward being a recognized fabricator at international level. This drastic move is against the conservative value that all the previous directors did. As this business is labor and capital intensive, the risk becomes more sensible when going for global arena. Why risk billions of berhad fund when you are not pretty sure about the turnaround and return. Furthermore at the time when many weaknesses not completely patched in all level of SDE community. SDE failed to have a full time legal adviser stationed in Pasir Gudang until the end even though the weakness in scrutinizing terms & conditions of contract with clients are so obvious.

  22. please probe certain project managers whose life like millionaire. What about something fishy about manpower supplies, architectural contract, other servicing contract etc. Please check it out about a manager having share (perhaps directorship via proxy)in a company that has business with SDE. The men lined up by current SGM as managers some of them are incompetent (I dont deny there are still some managers that are still good but they are few). Quoted from one of them said that “work less but smart” does not portray at all he is smart. What I can see that person is lazy, selfish to himself and becomes liability to the company.

  23. […] in the world. People in the market were already making cynical punts when they talked about Bakun, Qatar Project and Maersk Oil Qatar projects which Sime Darby only officially admit when it became clear that there were people negligent in the […]

  24. […] Musa Hitam and Board of Directors be accountable for the irrecoverable losses incurred by Bakun, Qatar Project and Maersk Oil Qatar which accumulated RM 1.3 billion in losses. More importantly, the call for immediate resignation is […]

  25. MACC recently has made its kick-off to probe SDE over mismanagement and CBT. Several officials were interrogated. Zaki was reportedly is on hot seat. In another related issue, SDE is striving hard to get its VO claim from MOQ which it feels optimistic to make it.

  26. The curse of GM’s post. Ahmad Faiza managed to be there only 3 years (2002 -2005) and many people thought he could stay longer as he got full trust from Jaafar Carrim (JC). Nobody had known that JC’s tenure as the MD for SDE was not long. Ahmad Faiza was deeply affected with this sudden incident when for unknown reason but of course not due to CBT offence, he was simply chased away from office by Zubir not long after Shukri assumed the post of MD SDE from JC.
    Zaki who took over the GM post from Ahmad Faiza in 2005 has thought he could stood there much longer than his predecessors including Arshad Ahmad who resigned in 1998. The can of worms has just been opened and being magnified by the authorities including MACC. It’s still uncertain whether Zaki can still salvage his SGM post. By then, SDE name could be vanished if new shareholders buy over.

  27. What about other JV such as co-owning MV Gerimal? Kadir had a big part played for this one. Selection of CPC to undertook portion of MOQ works? Zamri is the man behind this! During course of these happening where the hell went the finance, legal and group strategy people. Are they involved as well? Rahim, Azahar, Karen, Sharul Nizam etc where are you guys? On working level please probe the managers which live lavishly like Anbazagan, Adha, Wan Kamarul etc.

    May the truth prevail!

  28. […] Directors admitted “irregularities” on three accumulated losses projects, namely Bakun, Qatar Project and Maersk Oil Qatar recorded a loss of RM 1.63 […]

  29. Zaki just played puppet role only. Most of the decisions came from Kadir. Not sure whether this eel can still survive once reports from MACC, Internal Audit etc. released.

  30. Recent announcement from Hisham Hamdan to send back Kadir and Zamri to USJ and look after credit recovery division may relieve the abhorrence amongst SDE community especially at the ordinary level.
    It’s hope that this reshufflement does not mean to dodge these spin doctors from being answerable to all these shits which already hit out the fan. Let’s get all these people eat back their faeces.

  31. […] on the Bakun and oil and gas have been openly discussed in market. Even in publications. Including here in BigDogDotCom. Unfortunately, all of these fell out of the radar scope of the ‘illustrious members of the […]

  32. […] mengenai kes MCMC dan sebelum itu, pendedahan yang mendapat begitu banyak perhatian ialah mengenai salahlaku dan skandal Sime Darby dalam projek di Qatar. Ianya disifatkan oleh pakar dalam subjek itu sebagai “Painfully accurate” (Ketepatan […]

  33. Rumour spreads out that Arshad Ahmad was offered to rejoin SDE with the post that left more tahn a decade ago. Welcome back. He was indeed a good leader who has a clear vision, lateral thinking, hospitale, decision maker and good listener. A lot of good think he has done to improve Ramunia Fabrictors (RFB) inclduing double up the turnover consecutively yearly during his tenure there and the only contraint for him to turn over the company is because some decision might not align with the shareholders.

  34. Hari ni sudah ada yang kena….esok kita tengok lagi siapa yang kena….

  35. Madzelan Mohd Noor is coming back too. Now watch out Zaki’s gang that put him down like a thrash. Some of them easily forgot who had groomed them to the throne if not him, but you treated him like shit that made him decided to leave and joined Sapura

  36. It’s time now for Sime Darby to reshuffle completely SDE’s management most particularly PMT, Procurement, Engineering, Finance and HR. Don’t forget on Facilities dept. and HSE dept which are suspicous about their hanky panky business. which always be suspicious by SDE’s community on Some of them are leeches who will go and suck the blood of the new appointed leader. During Zaki’s tenure, they were no more than a bootlicker and a parasite that does not help the company’s fool proof system. It’s a classic case when the abuse of power and negligence went smoothly passing thru and breach the procedure right to Zubir. CFO Rahim is not competent enough like his predecessor to stop any unjustified fund request from SDE. He is not comparable at all with Choo Kay Kum for instance. Happy New Year.

  37. […] Darby Bhd. which has been in bad light since the mega accumulated loss of RM 1.7 billion from the scandals of projects, particularly in the Gulf States, decided to go one step ahead. Not […]

  38. In the legal suit against all the top gun of E&U Div. recently, I’m shocked to read that they paid for a third party worth around USD15 Millions just to secure that Qatar’s project. There is also about paying QP Engineering Manager worth RM5 Million which I suspect to persuade that guy to approve the VO that Sime had claimed to Qatar Petroleum (QP). It looks very stupid as that guy seemed not doing anything and QP never paid any single cent. This is very shameful and tarnished the image of Sime Darby as people thought SD just like other unethical company that can bribe people.

  39. Hi All. Its a pity SDE is in a bad shape today. Blame should be on the Petronas boys who came in, ex. Adnan, Kadir & Zamri. Come on these guys were with Petronas and as client you rely on the maincons to do a good job. But as SDE is the main cons, these guys did not know how to manage the team. From day one there was doubts abt Kadir & Zamri. Both were smooths talkers who talked big. I also beleive the lack of non-Malys in SDE is also another cause of sde’s fall! There are too many Mat managers around who go along looking for kickbacks. This is their style. The chinamen contractors has feed them well! Please look into payments made to foreigners to secure the QP and MOQ projects. Abt 100 to 200 million were paid to the sponsors and who knows this was real!

  40. I just heard that Kadir is now working in the Middle East. This leech is really hard-to-kill person. While others like Zaki, Shukri, Mahadzmin etc are tussling with their future, Kadir just like Houdini’s magic that can safely exit himself via a door to a secret tunnel heading to another town.
    The loss of money due to hanky panky businesses by Zaki and his boys if accumulated all won’t be billions and not even figure like RM100 millions. The real loss is due to extravaganza ambition by Kadir to turn SDE and Sime Darby E&U to be a mega entity that lead to the overgearing and overrun w/o measuring the real risk. Now wait and see another interesting showtime after QP and MOQ. The current ongoing ONGC project…

  41. The big fish is enjoying himself in Indonesia now. What Zaki received was chicken feed

  42. […] 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 […]

  43. […] summarily sacking of Sime Darby CEO Dato’ Seri Ahmad Zubir Murshid and admission of the RM 1.7 billion losses aggregated due to mismanagement and fraud is still so fresh. And yet Chairman Tun Musa Hitam, who failed to take responsibility of the major […]

  44. any update on sime darby selling of its o&g business unit??

  45. There is a potential that nobody will go behind bar or will be convicted guilty due to this fiasco. One reliable source told me that even Zaki’s case about the watch and furniture will be soon flashed out into sediment tank.
    Sueing Zubir, Kadir and Zaki about the losses does not grip well. I never heard of any employee in Malaysia has been sued due to inefficient management or even due to a blatant negligence in carrying out their duty.
    Somebody told me that those the names above could not do anything as there was a godfather intervening invisibly their administration. For me, whatever you claimed including to say that Musa is the real culprit is a deflective effort to save their butts form public eyes. The principle of accountability will not bleach away the blame on them. It’s your duty to carry out your roles and responsibility without fear and favor. If you allows any invisible hand to control you, any disaster cost will be still on you.
    Anyway, congratulation to Zaki and Zamri that will join one of the PSCs soon.

  46. […] months earlier, Sime Darby BOD painfully admitted the scandals which plagued the PLC, although these failed and scandalous projects have made Sime Darby as the laughing stock of the industry since two years before that. For the record, Sime Darby  is a mainstay of […]

  47. […] Sime Darby was literally the laughing stock of the oil and gas industry for the cock-up and scandalous Qatar Project and Maersk Energy Qatar, Musa was adamant that Sime Darby was doing the right thing. By the time they realize the reality […]

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