Sabre slicing Sime

The recent marathon 13 hour board of directors (BOD) meeting of Sime Darby Bhd. which saw the ‘admission of guilt’ and decisive decision of making Group CEO Dato’ Seri Ahmad Zubir Mursyid to “go on leave of absence” till his contract ends in November is somewhat commendable. Chairman Tun Musa Hitam announced that steps are being taken to fully understand the situation and restructuring being made, to operations, control and the physical structure itself.

When asked about anymore ‘dismissal’, his response is that “We need to understand the situation thoroughly and who is involved. It is still too early to tell whether exist any criminal intend actions”. He is proud that the BOD was unified in solving the issue. Even PM Dato’ Seri Mohd. Najib Tun Razak was unusually every quick to commend Sime Darby’s action which he regard as “Decision is inline with corporate governance”.

However, in the true spirit of ‘corporate governance and accountability’, inadvertently more should be done. Even at this moment where thorough investigations are being carried out. For starters, those amongst the current BOD who were part of pre-Synergy Drive Sime Darby Bhd. BOD, like Tun Ahmad Sarji Abdul Hamid, Tan Sri Ahmad Tajudin Ali and Dato’ Mohamad Sulaiman should resign or be ‘retired early’.

72 years old Tun Ahmad Sarji Abdul Hamid, has been in Sime Darby BOD for over 15 years

Former Chief Secretary to the Government and later became PNB Chairman Tun Ahmad Sarji has been in pre-Synergy Drive Sime Darby Bhd. BOD since the 1990s, is the most longest serving member. He assumed as pre-Synergy Drive Sime Darny Chairman when former Bank Negara Governor Tun Ismail Mohd. Ali passed away in 1998 and remained till Tun Musa Hitam was appointed in the tri-conglomerate being consolidated in 2008.

Tan Sri Tajudin Ali

Professional engineer Tan Sri Tajudin has been in pre-Synergy Drive Sime Darby since 2002 and being a former Executive Chairman of TNB Chairman, director of UEM Bhd. and Director General of Sirim, he gave ‘thumbs up’ for Bakun. He was also the BOD member who was looking into energy business, which spearhead the Qatar Project (QP) and Maersk Oil  Qatar (BOQ) projects. Tajuddin was also former BOD of Sime Darby Engineering, which undertook the much gloated QP and MOQ projects.

Dato' Seri Mohamad Sulaiman

Certified public accountant Dato’ Seri Mohamad was a veteran member of  Sime Darby management. His last job was Managing Director Consolidated Plantations Bhd. Before that he was Managing Sime UEP Bhd. from 1985-90. Besides Zubir, Mohamad was very familiar within the Sime Darby systems, reporting, controls and values and philosophy.

This is because the original Sime Darby Engineering was then Sime Sembawang and the Qatar Project (QP) was initiated and pitched during their time. Unlike the Bakun Dam project which suffered “Cost over run” for a “National service project ‘forced down their throats’ back in 2002” as an excuse, the Qatar Project and Maersk Oil Qatar  (MOQ) were about poor planning, risk management failure, poor project management and probably problematic procurement processes and control. The senior managers of SDE then who are still around within the post Synergy Drive Sime Darby should also be unceremoniously booted out, the same way Zubir was.

According to Musa, it is still too early to say any criminal conduct was attributed to the losses incurred.

The BOD and management have a moral obligation to deliver a project they (or the team under their stewardship) initiated and pitched intentionally, according to budget and time.  They also should have a proper reporting system and nip-the-problem-in-the-bud and not wait till being snowballed into catastrophic proportions. They have to assume full responsibility for the failure of the reporting system (which include internal audit and cost control), which something the ‘market’ already been talking about widely and at sundry.

Many believed that the BOD were either “misled” or “tried to sweep the problem under the carpet”. Of course any of the senior managers who were part of Sime Darby Engineering when they planned, pitched, executed, procured materials and services and delivered the QP and MOQ contracts should immediately resigned or be terminated. This is part of ‘accountability and  collective responsibility’.

That resignation must be completed even higher on the hierarchy in the ‘chain of command’ of the conglomerate which employs 100,000 people.  The ‘sabre slicing’* is really necessary, to show that Sime Darby as the largest plantation conglomerate in the world is  ready to take drastic action against their own people for the in-competencies and failures.

Most importantly, the BOD must assume full responsibility for the wholesome ‘system failure’.  The BOD, especially those from pre-Synergy Drive Sime Darby failed to question why the Bakun project was behind time and keep incurring more cost, right from the start (since 2002). In the QP and MOQ projects, it is unacceptable that Sime Darby BOD allowed the failure to take into consideration items like ‘country risk’ (when the project faced problems as the Iranian contractor appointed is bound by economic sanction against Iran) and poor project planning and management and deficient contract management, like the attempt to acquire vessels within a short space of period and without proper procurement processes. BOD members, especially who have been since pre-Synergy Drive Sime Darby are expected to be very familiar with the systems, controls, reporting and  values and philosophy, on top of the major business ventures. More over projects such as Bakun, QP and MOQ were pitched since pre-Synergy Drive Sime Darby.

Another point is that Sime Darby BOD took pride of the QP and MOQ when the industry was making a mockery of it. What was baffling that the BOD and management were completely oblivion on something that big, “Dead elephant in the room”, and failed to raise the alarm as they went along. That is without doubt negligence and poor conduct of duty, especially since these BOD members are very seasoned corporate figures.

A conglomerate that have been in business in this nation since 1821 must take bold actions to restore public confidence, especially punters in the capital markets. Hence the very least the resignation of the pre-Synergy Drive Sime Darby BOD members is a manifestation of a true ‘conglomerate that is decisive in corporate governance attitude and practice and ever willing to accept collective responsibility’.

*Sabre is a weapon used by cavalry units and the slice whilst charging on horseback will bring swift kill to the target

Published in: on May 15, 2010 at 12:15  Comments (17)  

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17 CommentsLeave a comment

  1. Sweeping problems under the carpet had never been good. The problems are still there hidden under the carpet waiting to explode.

    racist extremists in DAP is at it again

  2. Musa Hitam and the whole BOD must go. All of them were government servants, who probably know nothing about business, more so sophisticated business. Khazanah “CEO” and his cronies must also go, for not informing the government earlier.

  3. The losses started during Kuantan-Segamat Compressor Station Expansion project JV with Tractors Malaysia. Its a bad omen when SDE starts to employ former Peremba employees from Sudan project as their procurement personnels. FYI, Peremba suffers huge losses for Sudan project namely due to mismanagement by these employees similar to what Sime is experiencing now. No doubt QP and MOQ are poor risk management projects nevertheless, SDE must revamp their procurement department swiftly.

    • The problem with the project not because of procurement, but most of the contribution to the losses were because of design and engineering…. not because of the ‘badi’ of the former Peremba staff, but the poor design from Sime engineering dept itself…..

      i was in the project, and i dare to say that the former peremba personnel are the ones who save the project from becoming worse………… they are pure construction people rather than engineering people from Sime………..

  4. One Billion loss is chicken feed to Musa Hitam!

  5. I agreed with PakTam and the Govt should stop engaging ex-civil servant top guns to head GLCs. Govt is also to ensure only suitable person(s) are in the BOD of GLCs.

    May be about time GLCs are to announce un-audited Balance Sheet quarterly to the public to ensure constant monitoring.

    In 1998+, it was Sime Securities (Sime Bank).
    A decade later, it is Sime Darby.
    Who’s next ?

    Is the Govt waiting of another ‘Slime’ like disaster before taking any action ?

    Like local council waiting for another dead body before putting a traffice light at a junction.

    Just my thought – a non business or account background.

  6. One thing common about all these rascals…they are all also UMNO types! So obviously to most of us their actions were as xpected. So what is the fuss all about?

  7. Just look at the history ,the company started in 1821….its track records speaks for itself but if you look deeper at the people in the helm then and now the answer is so glaring. these current people are not only so incompetent but….. draw your own answer all these so call bumiputra kapitans..only self serving and…..

  8. Wondering what the heck these directors are still doing on the board. If they should all resign …and let external auditors do the job properly…no way jose for the public to see this as an idependent investigation…obviously this so called internal investigation is just a whitewash….If I were a shareholder of this company I would sue these board parasites big time….if this happens in the US all these goons probably will be wearing orange jumpsuits somewhere in the holes….well they are very lucky to be malaysia elites …these men sound like very “experienced” and high qualified crooks, but in reality the are just another corrupted arrogant and stupid idiots who know next to nothing about corporate accountability! Malaysia has been taken for a ride for too long…The present PM does not help either! They are all in the same tribe on this one! Corrupt bloodsuckers!

    a malaysian observer

  9. Big Dog,

    One of the BOD mentioned above is also involved in another GLC – that GLC potentially has big losses in Qatar due to court action!

  10. They all look pretty smart in pictures, but I do not know what’s in their heads.

  11. […] It is thought that Chairman Tun Musa Hitam ‘pushed’ for the appointment of Bakke, even though the BOD gave the interim confidence to Azhar and a week later, agreed to accept the ‘Troika’ management representation and chain of information to the BOD. For someone who reiterated his position of being a ‘Non Executive’ many times over, this appointment demonstrate otherwise. He should consider using his ‘Executive Decision’ clout to uplift the moral within Sime Darby Group, especially allowing the new ‘Troika’ form of reporting prove itself first and most of all, some members of the BODs who are veterans of the Bakun dam, Qatar Project and Maersk Oil Qatar proj…. […]

  12. […] run”, if not anything criminal (yet to eb proven as investigations is on going). Until today, none of the BOD either went to their own or made to go, which too many find to be highly irregular especially from the position of accountability and […]

  13. […] Musa should really go. So should some of the BODs, namely those who were from pre-Synergy Drive Sime Darby BOD. Its a matter of accountability. Its a matter of principle. It is a matter of restoring confidence […]

  14. […] executive, SDENU CEO Dato Syukri was “asked to leave”, no other departure was recorded. Not even any of the members of the pre-Synergy Drive BODs, who are still around and supposed to assumed responsibility as part of directors’ fiduciary […]

  15. […] Darby Energy and Utilies losses and scandals, 15 weeks ago here in BigDogDotCom we already demanded some of the BODs be sacked. No doubt Sime Darby did show some profits despite the accumulated losses of the four […]

  16. […] Darby already got three of the Board of Directors who are supposed to be responsible and held fiduciary duties for these losses to go at last […]

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