Was it an ego thingy more than anything else?

Tun Musa Hitam’s version of ‘Troika’. We here at BigDogDotCom found it rather strange that Sime Darby Group Chairman Tun Musa Hitam called for the media conference yesterday evening just to announce the appointment of Felda CEO Dato’ Mohd. Bakke Salleh as the new Group CEO for Some Darby, without actually announcing the date of commencement and more importantly, without Bakke even setting a date to relinquish his current position. This highly irregular hasty call is made when Dato’ Seri Zubir Murshid (the Group CEO who was asked to leave still has his contract effective till November) is legally still the Group CEO, Group Plantations MD Dato’ Azhar Abdul Hamid is the action Group CEO (endorsed by the BOD a month ago) and now Tun Musa announcing a new fellow coming but without specifics.

Why is this?

It was said that Azhar being a no-nonsense-straight-shooter, does not rub Musa as a cocky political-has-been the right way. As an arrogant man as he is known for, though he said invariably that  he encourages dissenting views but in actual fact, he usually quite do the opposite. History has shown that Musa as then the Deputy Prime Minister, was very uncomfortable when then Prime Minister Dato’ Seri Dr. Mahathir Mohamad retained the twice challenger to his position as UMNO Deputy President Tengku Tan Sri Razaleigh Hamzah in the strategic and highly powerful Minister of Finance cabinet chair. Musa was Tun Dr. Mahathir’s biggest opponent in then the Government of the latter’s ambitious and grand plan of going industrial, especially Proton which in good time was proven to be a Malaysian success story. It is also thought that Azhar would put his foot down for any spending or tactical decision that Musa would want to do if the former thought that it does not have direct commercial value for the Group.

Of course, Musa would also use personal issues between other Sime Darby BOD members with Azhar against him. Probably the arguments of Azhar being ‘hot tempered’ executive as a strong point against him, but then again being a professional who is passionate about taking a stance that he could substantiate with numbers and fact, an ego trip would be a lame excuse to deny progress for Sime Darby. The personalities within the BOD clearly illustrate that some of them think highly of themselves in those seats being larger than life.

The fact is that, the BOD should be answerable for the three major scandals that loom the largest palm oil plantation based conglomerate 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 stewardship then just mere “Cost over run”, if not anything criminal (yet to be 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 integrity.

Is Tun Musa trying to hide something really big like “A rotting elephant carcass in the room”, by having a ‘new-kid-in-the-block’ running the show?

No doubt that Sime Darby badly needed a good ‘spring cleaning’ soon. Some of the management who have been unethical and unprincipled must be reprimanded and this must be done quickly. Scandals that big do not happen without middle and senior managers being an integral part of it. It is doubtful that Bakke would be able to do a good job at this since he probably would not know most of the people that he would be leading from now on and the extend of these peoples’ ability and limitations. Then removing Azhar completely out of the picture would be best manner to retain things ‘status quo’.

Bringing in the top-job of a Group which employ 100,000 people from outside is definitely the best way to stunt the succession plan (if there is any) and at the same time kill the moral of the Sime Darby loyalists. Tun Musa was seen within Sime Darby as being bold and decisive when the decision to summarily instruct Zubir to go for a ‘leave of absence’ a little under 5 weeks ago but since yesterday, is thought to be completely losing all that ‘goodwill’ gained. For the first time since the Synergy Drive merger of the old Sime Darby, Guthrie and Golden Hope in November 2007, all the Sime Darby-zens rallied as one in this episode of the appointment of Bakke to be their Boss.

Bakke is a plantation man, who have had the luxury to do his job in GLCs where the Federal Government is there to back him up. Now, he will have to do this the commercial way and succumb completely to market forces and demands and expectations of the shareholders. 30% of Sime Darby income comes from non plantation such as industrials, properties, motors and even energy and utilities. Industrial and motors respectively  contribute RM 5.96 billion and 7.06 billion of the Q3 turnover for the Group and  RM 537 million and RM 233 million in profits, to complement plantations’ RM 7.98 billion of sales and RM 1.706 million in profits. Most of these, especially industrials and motors do well because the management have a good relationship with the principals, which is a key factor of success of brands like Caterpillar and BMW. Unlike Azhar, Bakke has no relevant experience in these trades.

Of course Sime Darby cannot be mentioned without stating that it is the fatest growing Malaysian MNC in the region. Much of Sime Darby’s operations are contributed from Indonesia, Singapore, Hong Kong, China and Australia and the earning is substantial. Sime Darby is also venturing into infrastructure operations in China which include construction and operation of ports and utilities. This is nothing like what Felda and Tabung Haji have to compare against, even jointly.

The effectiveness of Bakke to do what is expected for him to do and follow through the programs has now becoming doubtful. He is 56 years old (on the retiring leg) as compared to Azhar who is seven years younger and the latter is thought to be more open for new ideas and getting things done. Nothing significant Bakke demonstrated as the Felda and Tabung Haji Boss where else we in bloggosphere already learnt of Azhar’s ambitious but calculated with risk to double Sime Darby’s performance and results within five years.

We here in BigDogDotCom have empirically expressed our deep distrust to master-of-corporate-manipulator Minister-in-charge-of-EPU and former Minister of Finance II (during PM ‘Flip-Flop’ Dato’ Seri Abdullah Ahmad Badawi’s bleak five years of digressing and counter productive socio, political and economic period) Tan Sri Nor Mohamed Yakcop’s nurtured and developed executives. The appointment of Bakke to this position comes with a lot of skepticism that we here are worried that not much time and space left to be proven wrong.

Did Tun Musa, Tun Ahmad Sarji, Dato’ Seri Panglima Andrew Sheng, Kevin Barlow and the other BOD members who sit up there being ‘high and mighty’ jointly and severally consider all these before they make their hasty decision, just three weeks after they actually accepted the ‘Troika’ management representation to the BOD as a mechanism against future possibilities of “being misled”? Or was it ego and personal agenda that overcame the best of their judgment?

If there exist any tinge of ego in the decision to pre-maturely but irregularly appoint Bakke as the Group CEO instead of endorsing Azhar’s interimship against the objectivity of the exercise that eventually would strategically affect a lot of things, which include the profitability and ability to pay dividends to more than 8 million Malay and Bumiputera unit trust holders under PNB’s ASB and ASN schemes, then the BOD members are the ones who should be replaced.

Published in: on June 15, 2010 at 12:15  Comments (13)