Sime Darby Forensic Audit: Another BOD cover up?

Sime Darby Bhd. announced to Bursa Malaysia yesterday evening that they will not make the findings public of the recently concluded forensic audit that was carried out after the Board of Directors fully realised of the losses incurred in Bakun, Qatar Project, Maersk Oil Qatar and the “Marine Project” on 13 May 2010. In that extra long special BOD meeting, President and Group CEO Dato’ Seri Ahmad Zubir Mursyid was asked to leave.

BOD Chairman Tun Musa Hitam announced that a ‘forensic audit’ would be immediately carried out to determine the cause and those who are responsible of these “irregular practices which resulted to extra ordinary losses”. Accounting firms KPMG and Deloitte were appointed and Musa promised to fully conclude the findings, which was thenthe forensic audit  expected to be completed by August.

The forensic audit found that there were misconduct and breaches of duty in these projects, which included element of criminal intent by some of the senior management of the Sime Darby Energy and Utilities Division.

The Sime Darby BOD have now decided to not make public of the findings. It was said that making the forensic audit public would hamper the effort to bring all those involved and responsible for the ‘misconduct and criminal intent’ to face the music and  according to a Sime Darby insider “Probably would impair the initiatives to recover some of the losses and realise as much as possible”. It was believed that this decision to keep mum made by the BOD yesterday was under advice by their legal advisers. Legal issues to recover some of the monies from irregular deals within the three projects were some of the excuse given.

Tun Musa announced that Sime Darby would make public the findings. He even promised to resign if he is accountable for the losses.

Friday May 21, 2010

Tun Musa Hitam: I’ll step down if found accountable

KUALA LUMPUR: Tun Musa Hitam has no qualms stepping down as the chairman of Sime Darby Bhd if the board is proven to be accountable for the huge losses of RM964mil from delays and cost overruns in several projects involving the company’s utilities and energy division.

The RM964mil provisioning is made up of losses of RM200mil from the Qatar Petroleum project, RM159mil from the Maersk Oil Qatar project, RM155mil from a project to construct vessels for use in the Maersk project and RM450mil from cost overruns in the Bakun project.

“I do not mind stepping down but it must be based on facts. At this point it is not clear yet who should be held accountable.

“We have external people looking at the matter from the legal, financial and accounting aspects now.

File pic of Tun Musa Hitam: … We have external people looking at the matter from the legal, financial and accounting aspects now.

“I have told my board that if it comes to us being found guilty, we must be accountable but we must go through the process to be fair where every decision must be based on the principles of corporate governance,” he told reporters following the concluding session of the 6th World Islamic Economic Forum.

Musa added that the board consisted of credible people ranging from accountants, lawyers and auditors that after seven months of investigating this matter, had come up with short and long-term measures.

“The short-term outcome has been revealed at the previous Sime Darby press conference and in the long run we plan to do restructuring at all levels but it’s a little bit pre-mature to announce the details now.

“If we are in the wrong, we have the courage to admit where necessary and we will not let the water just pass under the bridge.

“At Sime Darby, work is still in progress because it is not a small matter but we will not rush in pointing fingers at anyone,” he said in response to the news report that urged that Sime Darby board should be held accountable for the losses.

On mitigation measures to reduce the losses, Musa said a loss was a loss but Sime Darby would have to be more prudent in the future undertakings.

On the allegation that the “actual” losses were more than RM964mil, Musa said this was a speculation while the facts were already stated in the earlier statement to Bursa Malaysia.

“And I will not reveal the time line for the investigation process,” he said.

The losses is to be realised in second half of financial year 2010 ending June 30.

The group announced a profit of RM1.1bil for the first half of FY2010. The third quarter results of the Group will be announced on May 27, 2010.

President and group chief executive Datuk Seri Ahmad Zubir Murshid, has been asked to take a leave of absence starting middle of this month prior to the expiry of his contract on Nov 26.

To recap, the above findings were the results of a board work group established in October 2009 to assess the operations of its energy and utilities division in terms of corporate governance and performance of the division, following its results in the previous financial year.

The work group consists of Datuk Seri Panglima Andrew Sheng Len Tao, Tan Sri Wan Mohd Zahid Mohd Noordin and Datin Paduka Zaitoon Othman and they were advised by independent lawyers and accountants.

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The first thing that struck our mind when we learnt of this non disclosure of the ‘forensic audit’ is: Is this another cover up? Who are the people the BOD “Trying to protect”? Are these members who are being ‘protected’ are some of the BOD themselves?

The forensic audit should able to gather enough evidence to get the perpetrators for what they did to Sime Darby. If making it public would allow these perpetrators to find ways to cover themselves, then the forensic audit isn’t comprehensive and water-tight enough. ‘White collar’ crimes leave behind trails, usually documents and information.

The Sime Darby BOD comprises of “2 Tuns, 5 Tan Sris and 4 Dato’s” already failed their fiduciary duty as stewards and custodian for the shareholders when they allowed the management (in this case, CEO Zubir) to “Mislead and give wrong information about the three ‘sick’ projects” all the while. But then again, isnt it the BOD’s responsibilities to ask the right questions and demand for answers for the progress and status of these projects as they went along, especially when people in the ‘market’ were openly mocking Sime Darby for these projects as something “Not to do”?

Sime Darby BOD now already faces perception issues of not able to carry out their duty properly. There are strong demands that they resign and allow other persons ‘untainted’ to complete what they had to do in the first place.  Keeping mum about this forensic report, especially after Musa promised to ‘reveal all’ isn’t their best option.

Probably safe guarding the integrity of the Sime Darby BOD and public faith on largest public listed company in the country and coming out with very bold steps of control and reporting system to prevent this from happening in the future,  is more important than recovering some of the RM 1.7 billion losses.

Sime Darby has enough reserves to underwrite these losses and still not impiar its obligations against the annual dividends that schemes such as ASB and ASN under PNB depend on and its ability to meet its commitments. Giving shareholders and stakeholders comfort is far more important than these ‘water under the bridge’ losses.

We hope the shareholders exercise their rights in this upcoming annual general meeting sometime in November. This include getting most of the ‘extraordinarily illustrious’ members of the Sime Darby to go and face the music for their failure to safeguard the interests of the company and shareholders.

Published in: on September 21, 2010 at 10:42  Comments (2)  

Senior Gen Mgr Sime Darby Energy arrested by MACC?

One Senior General Manager Operations for the Kumang Cluster project, Mohd Zaki Osman was said to be arrested by MACC for questioning. He was picked up in Johor Bahru at 1600hrs.

It seems this is the second senior executive Sime Darby Energy and Utilities that recently being ‘hauled‘ by authorities. So much attention was placed on Sime Darby after Board of Directors (BOD) admitted in mid May for the ‘irregular’ losses amounting to RM 1.63 billion for Bakun, Qatar Project and Maersk Oil Project. The ‘reporting to BOD’ was blamed and Group Chief Executive Dato’ Seri Ahmad Zubir Murshid was asked to take “absence of leave” till his contract ends in November.

This arrest is part of the process undertaken by Sime Darby BOD to ‘clean up’ the mess left by former Sime Darby Engineering MD Dato’ Shukri and Dato’ Seri Zubir. This is in the midst of newly appoint President and Group CEO Dato’ Mohd. Bakke Salleh, who has been alleviated from Felda.

This is a herculean task for Bakke. For starters, Bakke got to in short span of time and opportunity learn who-is-who within the conglomerate that employs 100,000 persons. Then he naturally need to understand the strength, capability and weakness of the senior managers and significant players. Of course, he also need to ‘pick-up-here-and-there’ who are amongst the managers that were ‘tainted’ in all sorts of scandals that lurk and loom, which now has surfaced.

Published in: on July 14, 2010 at 22:51  Comments (10)  

Sime Darby Energy & Utilies executive hauled?

Sime Darby Energy and Utilities senior executive is said to be ‘picked up’ by MACC, upon stepping into the country from a GCC state.

Unconfirmed report with regards to an MOQ General Manager who was ‘picked up’ at KLIA two weeks ago on 24 June upon arrival from Qatar. More are believed to also be ‘picked up’, in connection of the Kumang Cluster Project. Another report is at the moment centred on a Senior General Manager being hauled up too. MACC recently paid a visit to Sime Darby HQ after the Board of Directors admitted “irregularities” on three accumulated losses projects, namely Bakun, Qatar Project and Maersk Oil Qatar recorded a loss of RM 1.63 billion.

Main stream media business media such as The Edge and blogs like this one accurately reported these losses, alleging gross mishandling and probable corrupt practices of the projects. After 18 months of ‘writings on the wall’, in May Sime Darby BOD decided to ‘terminate’ Group CEO Dato Seri Ahmad Zubir Murshid on 13 May for “Misleading the board” and announced via the main stream media the much talked about losses. So much attention had been focused towards Sime Darby since and even it was raised in the current sitting of Dewan Rakyat.

Sime Darby is expected to make first round announcement on these projects by next month. So far except to the premature ‘termination of contract’ of Zubir and another 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 duties.

*Updated Saturday 10 July 0800hrs

Published in: on July 9, 2010 at 19:36  Comments (2)  

Bakke Salleh appointed Sime Darby Group CEO?

Felda CEO Dato' Mohd. Bakke Salleh is being tipped as the new Sime darby Group CEO

Plantations based conglomerate Sime Darby Group Chairman Tun Musa Hitam is expected to call for a media conference this evening, to announce the new Group CEO since the untimely but premature ‘ departure’ of Dato’ Seri Ahmad Zubir Mursyid just exactly a month ago  in a huge controversy and probably scandal for the largest palm oil planter in the world.

Unconfirmed reports state that Felda Holdings Group CEO Dato’ Mohd. Bakke Salleh is being given the honour.

Dato' Azhar, flanked by Tun Musa Hitam and PM Dato' Seri Mohd. Najib Tun Razak at the announcement of the mapping of the palm oil genome

Presently, since the premature ejection of Zubir, Group Plantations Managing Director Dato’ Azhar Abdul Hamid has been appointed as the acting Group CEO. Not much could be said about Bakke taking over a conglomerate which in a very short time would be land owners and developers of 1 million hectares of palm oil (400, 000 hectares of ‘brownfield’ and 600,000 hectares of ‘greenfield’), being the largest producer of palm oil crude in the world. However, Azhar has plans for the Group. A master of producing palm oil in market conditions without having the luxury of direct Government subsidy, Azhar’s plantations division contributes 70% of the Group turnover and income. His mid term plan is to drive the whole Group to deliver 100% growth within five years.

“In many businesses, ideas and innovation fail to grow and because lack of capital and resources. Here (in Sime Darby), we have it all”, in his idea of promoting intrapreneurism amongst the executives as a drive for better results. Obviously, he intended to harness everyone’s competencies and creativity.

Former accountant turned  Islamic banker Bakke was previously in Tabung Haji, another large palm oil plantation group after Sime Darby and Felda. It was said that Tabung Haji’s cost of operations are not desirable against market forces and both Felda and Tabung Haji have the luxury being GLCs, unlike Sime Darby which is totally market driven corporation. Bakke would probably take a whole year just to learn names and their competencies in a conglomerate that employs 100,000 people and in tough times like this, probably its not the best opportunity to ‘Change horse mid-stream’.

What is worrying is that Bakke is one of those executives hand picked and nurtured by Minister-in-charge of EPU and former Second Finance Minister (at the times of PM ‘Flip-Flop’ Dato’ Seri Abdullah Ahmad Badawi’s counter productive growth of socio, economics and politics bleak interregnum period) Tan Sri Nor Mohamed Yakcop. It doubt that Sime Darby as a Group is able to afford further scandals and ventures that would bring temporary glitch to the Malay controlled corporate scene, such as Khazanah Holdings. This is over 8 million Malay and Bumiputera unit trust holders depend on Sime Darby’s profitability and most of all, ability to fork out cash and pay out dividends.

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 less than two weeks 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 projects to go first.

*Updated 1525hrs

Tun Musa made the announcement this evening at Sime Darby Convention Centre:

Jun 14, 2010

Sime Darby names new CEO

KUALA LUMPUR – MALAYSIAN state-controlled conglomerate Sime Darby Berhad on Monday named Mohamad Bakke Salleh, a top official at plantation giant Felda Group, as its new president and chief executive.

The appointment comes after Sime Darby in May posted its first quarterly loss due to massive losses from its energy division.

The conglomerate recorded a loss of 308.6 million ringgit (S$131.74 million) in the three months to March 31 compared with a net profit of 150.6 million ringgit in the same period last year.

Yeh Kim Leng, chief economist with RAM Holdings, told AFP the number one task for the new chief was ‘to extricate the company from the current mess’.

‘Mohamad Bakke has to pull the company out of the mess and refocus on its core strength which is in the palm oil plantations and its downstream processing business.’ The 56-year-old Mohamad Bakke is currently group president and chief executive of Felda Global Ventures Holdings, the commercial arm of Felda Group.

The conglomerate last month had asked group CEO Ahmad Zubir Murshid to take a leave of absence before his contract expires in November after an internal investigation uncovered cost overruns in the energy and utilities division. Anti-corruption authorities had said they would investigate possible graft at the firm, Malaysia’s number two company by market value. — AFP

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and

2010-06-14 18:27

Sime Darby gets new president

KUALA LUMPUR, Monday 14 June 2010 (Bernama) — Datuk Mohd Bakke Salleh has been appointed as the new President & Group Chief Executive (PGCE) of Sime Darby.

The appointment is to take effect as soon as practicable, Sime Darby said in a filing to Bursa Malaysia today.

Sime Darby said Mohd Bakke, 56, was chosen in view of his expertise and experience.

Mohd Bakke, who is the Group President/Chief Executive Officer of Felda Global Ventures Holdings Sdn Bhd (Felda Global), has a proven track record in managing large corporations, corporate restructuring exercises and management expertise in the plantation and property industries, it said.

He is also highly regarded in the corporate sector.

Prior to his appointment at Felda Global, Mohd Bakke served in various capacities within Government Linked Companies and Government Linked Investment Companies.

He has served as the Group Managing Director of Felda Holdings Bhd, Group Managing Director and Chief Executive of Lembaga Tabung Haji and also as the Director of the Property Division of Pengurusan Danaharta Bhd.

Sime Darby said it will make the necessary announcement when the appointment of Mohd Bakke is effected.

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*Updated 1930hrs

More analysis and commentaries to Bakke’s irregular ‘announcement to the Group CEO’s post but without specifics’. 24 hours from this original posting.

*Updated Tuesday 15 June 1300hrs

Published in: on June 14, 2010 at 12:46  Comments (21)  

Sime Darby: Its time to move on and forward

The acting Group CEO of the largest plc in Malaysia Sime Darby Bhd. Dato’ Azhar Abdul Hamid met the press and analysts to announce the third quarter pre-audited results of their financial year on Thursday. After making adjustments and provisions of RM 964 million to all the financial scandals which now out in the open, Sime Darby recorded RM 277.5 million loss for the period. The value of net assets per share dropped from RM 3.56 to RM 3.49.

That is expected as Sime Darby board of directors (BOD) announced the much talked about losses from scandalous projects, Bakun, Qatar Project and Maersk Oil Qatar and the summary ‘dismissal’ of Group CEO Dato’ Seri Zubir Mursyid 12 days ago.

Azhar the Sime Darby Plantations boss, now acting Group CEO

In the session to meet analyst on Thursday evening,  Azhar spoke about on what actions to be taken up next. Sime Darby BOD complained that they were ‘misled’ by ‘management’ (Zubir) on the three scandalous projects all these while as being, “Cost overrun and ‘variation order’ “. New measures are now being taken on the reporting to the BOD. Two ex-officio BOD members the Group COO and Group CFO would now accompany the Group CEO in BOD. This ‘Troika’ will now have more freedom to report to the BOD on the latest info and take any questions. Of course more tighter controls, which include BOD members sit in one of the five divisions’ committee set up to monitor progress.

The bantering that Sime Darby went these past two weeks will be a really good lesson to learn. As business managers, the BOD and management now are compelled to be very vigilant. The confidence of the stake holders is pertinent to ensure that Sime Darby is allowed to progress and more importantly venture into business operations. Then again, ventures coupled with good strategy and corporate governance is the only way to sustain growth.

In a private meeting after announcing the third quarter results yesterday, Azhar was asked what would be his plan to drive Sime Darby forward, if he is being confirmed at the Group CEO’s job. He would like to drive Sime Darby forward more aggressively and bring much better values for the share holders. For one, he wants to double Sime Darby’s turnover and net income by 100% within 5 years, an ambitious steady growth of 20% per year.

“Why not? We have to aim to achieve”.

This is very ambitious. The fundamentals look convincing. When the global capital market shows positive recovery, Sime Darby would eventually go uptrend. Then again it is all about the numbers. The strong cash position will ensure that all activities could be continued to progress upwards and expectation of the stakeholders are met.

The Group which rely 70% of their income activities from plantations already almost achieving the 1 million hectares land bank target soon. This include ‘greenfields’ abroad, which include 200,000 in Liberia. Within five years, all of these estates would be ready to produce palm oil and making Sime Darby the largest producer in the world. The fact that the current ‘Troika’ comprises of accountants all from plantations background shows how serious they are in focusing on making the Group work.

“We have to balance on our plantation projects. ‘Brownfields’ could be pricey but at the right price, it will bring almost immediate returns. Sometimes we have to sacrifice profits now for bigger profits after five years. That is why we need a good strategy and execution planning”.

Growth is also set on the motor, industrial and properties divisions. The motor division is set to be a major player. Being the largest property developer  in the country, they now aspire to be the best with innovative products and probably significantly change the Malaysian home style and home dwellers behaviour and lifestyle. “The we will now let home buyers tell us what they want in their homes”.

On the re-development of KLGCC, which upgrade and renovation works which started from a planned budget of RM 80 million and now going above RM 200 million,  he justified by stating “We have to offer a golf resort at that level. Now that we have developed the product, its time to sell. Kuala Lumpur needs a golf resort of this stature”.

Azhar would want the managers with Sime Darby to deplore all resources available such capital, processes and market clout to grab business opportunities “We want them to be ‘hungry’ and entrepreneurial in their ventures. This is how we can achieve growth and bring value for the shareholders”.

When talking about new areas that Sime Darby should be venturing into, he said that the conglomerate which merged in the end of 2007 from three plantations conglomerate had already been involved with ‘capital intensive investments’. “We already have too many of these ventures. We should be looking into new areas such as ‘negative capital’ business activities”. It was obvious that he was talking about retail and hypermarkets and there is tremendous growth for the consumer driven cash business. “There are ready markets and consumers”.

It is obvious that whilst all the investigations is ongoing to determine what actually happened and responsible parties be identified, Sime Darby should be charting its course on full steam on recovery and serve the interest of the stakeholders. “We cannot undo what have been done. We now should focus on realising the full value what we can offer, especially being a true Malaysian global conglomerate”.

Azhar is well aware of PM Dato’ Seri Mohd. Najib Tun Razak’s bold New Economic Model of making Malaysia into a high value economy. Realising the full potential and aiming to reach a RM 85-90 billion turnover level by 2015 is his way of translating the courageous plan to move Malaysia forward. When asked about the ‘minimum wage’ being proposed, he said that Sime Darby already paying between RM 1,300-1,600 per plantation worker a month, which include productivity incentives. “Yes, this will bring our cost slightly up but we expect productivity. We have to be realistic on our cost of production, taking in the inflationary factors”.

This ‘value proposition’ is refreshing. No doubt Azhar is new at this, doing it for the Group. However, we are confident that he learn fast. Sime Darby as Group now need to come together and work as a formidable team. He seems to be  open to listen and accept new and innovative ideas, including bringing in fresh personalities from outside. He is even open enough to engage new media, which include bloggers, which we find very refreshing.

“Our core values and philosophy remain the same. Our dividend policy is still at 50%”, is very comforting  to learn from the person who is at the helm and on top of things, despite a lot obstacles in the way and it is not the best way to take over a steaming ship.

It seems Azhar knows exactly what he wants to do, where he is going, how to get there soon, the ability to realise the full potential of Sime Darby workforce and human capital and realistically understand the limit of all the Group’s resources. Its time to move on and go forward. 8 million ASB and ASN unit trust schemes are dependent on Sime Darby Bhd. going the right way and making the right decisions.

*Updated 0830am

Published in: on May 28, 2010 at 01:12  Comments (10)  

Another sad story from Sime Darby Energy

The news about cost over run for Sime Darby Energy ‘jewel project’, the Bakun Dam, was out in the MSM today. The accumulated losses is RM 1.7 billion, which is the same contract sum calculated when the original award was given in 2010.

Starbiz has the report, which says it all:

Wednesday May 5, 2010

Sime’s Bakun losses balloon to RM1.7bil

By RISEN JAYASEELAN
risen@thestar.com.my

PETALING JAYA: Sime Darby has incurred around more than RM1bil in total cost overruns from carrying out the civil works contract for the Bakun hydro-electric project, sources said.

One estimate puts the total cost overrun figure in the region of a whopping RM1.7bil, almost the same size as the Sime Darby’s actual Bakun contract of RM1.8bil that it had secured back in 2002.

When contacted, Sime Darby did not deny or confirm this.

In an emailed reply, the company merely said that it had made provisions to the tune of RM130mil for its share of the cost overruns in the Bakun project.

The discovery of the more than RM1bil cost overrun in the Bakun project is believed to be among the findings of the special taskforce within the group that was set up late last year to probe losses in its energy and utilities division.

The taskforce is also looking into the reasons for the cost overruns and whether there were lapses in internal audit and whether other improprieties occurred.

It is understood the Government has agreed to reimburse Sime Darby for around RM700mil, leaving Sime Darby with around RM1bil to be dealt with, by some estimates.

Sime Darby’s energy and utilities division recorded an operating loss of RM110mil in the second half of its financial year ended Dec 31, 2009, compared with a profit of RM56.3mil previously. But within this division, its oil and gas and engineering divisions’ losses alone totalled RM201mil.

However, Sime Darby said this loss was due to overruns from another project, namely its RM2.1bil Maersk Oil Qatar (MOQ) project.

“Sime Darby recognised a project loss for MOQ amounting to RM210mil (including the impact of foreign exchange losses). As a result, the oil and gas segment recorded losses of RM201mil in 1HFY2010,” it said in the email to StarBiz.

Assuming the cost overruns have taken place in the Bakun project, the group will still need to deal with a significant amount of provisioning or expensing, which could seriously dent its profits for FY2010.

When asked if Sime Darby will be providing or expensing any amounts this year arising from the Bakun project, Sime Darby said: “As part of its disclosure obligations, Sime Darby regularly reviews its portfolio of projects and if required, makes provisions in accordance with the Group’s accounting policies.”

Assisting the taskforce in its findings were specialists from external accounting, legal and engineering firms, sources said.

To recap, Sime Engineering, a unit of Sime Darby, was awarded the civil works for the Bakun project in September 2002 at a fixed lump-sum price of RM1.8bil. It has been reported that Sarawak Hidro Sdn Bhd has approved a variation order for RM700mil for the Bakun project. Sime Darby did not confirm or deny this.

“As with all such construction projects of this nature, we have received periodic payments and agreed claims from the Government. In the past, some cost overruns were incurred due to increase in material costs and variations in design but these have been dealt with,” Sime Darby said in the email reply.

Sarawak Hidro is a wholly-owned subsidiary of the Ministry of Finance Inc Malaysia and entrusted to develop and manage the Bakun project since May 2000.

Sime Darby had yet to reply to questions posed to it by StarBiz yesterday afternoon.

But in Sime Darby’s press statement when announcing its first-half results, president and group CEO Datuk Seri Ahmad Zubir Murshid said that there were issues with the energy and utilities division.

“We have faced several challenges with the oil and gas business unit especially with operational efficiency and project management. Nevertheless, with a new management team on board, measures have been taken to increase operational efficiency and improve our project management capabilities,” he had said.

A change in leadership at its energy and utilities division had taken place recently, following the resignation of Datuk Mohamad Shukri Baharom

Mohamad Shukri was replaced by Hisham Hamdan, who was previously the executive vice-president for group strategy and business development.

Sime Darby has also said it has been taking steps to prevent a repeat of the cost overruns, including reviewing and re-evaluating systems and processes in the division.

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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.

This just to show how incompetent those guys who were entrusted to manage the division. Full clean up must be done and those responsible for these debacles must accept and that they had caused great injustice to the company and division. Some heads must be chopped to ensure that the division will not go into wrong and disastrous futile direction.

PM Dato’ Seri Mohd. Najib Tun Razak, who is also the Finance Minister must instruct a full blown investigation really fast. Sime Darby Bhd., now a huge conglomerate when Synergy Drive Sdn. Bhd. amalgated the three largest plantation and property based PLCs, Sime Darby Bhd., Guthrie Bhd. and Golden Hope Bhd. to the largest merger Malaysia and South East Asia capital market ever saw.

Sime Darby is also one of the mainstay for investments of Amanah Saham Baru and Amanah Saham Nasional unit trust holders. In the past, Sime Darby is one of the major contributor for ASB’s generous dividends pay out annually. The continuous slide of Sime Darby profitability will affect the ASB and ASN in the medium term.

Sime Darby’s blunder is not a good example for PM Najib to woo foreign capital and debt market investors and punters into the Malaysian corporate scene. In fact, it would be counter productive to the ‘New Economic Model’ ambitious agenda to transform Malaysia into a high value economy when the largest listed company keeps falling into ‘bad venture pits’. Of course, the audit must also look into possibilities of ‘hanky panky’ in the procurement of materials and services, which is the major factor of the cost over run.

Two consecutive huge losses must be bad for morale and confidence. Probably it is time that ‘people restructuring’ should take place. They say “Fish gets rotten from the head”. Obviously the perils that  SDE faces today is considerably due to poor management and probably controls. Since its spring time here in the northern hemisphere, so the ‘clean up’ should be across the board. There are considerable Malaysians, which include professional Malays with vast MNC exposure to assume positions in the board rooms and management.

*Updated Thursday 6 May 2010 600pm

Sime Dary Bhd. issued this statement explaining a taskforce was set up to look into the issues raised here.

Published in: on May 5, 2010 at 20:31  Comments (8)  

What will happen to patients like Hashim when Sime Darby takes over?

bloody-slimy

On the eve of the Government making a decision on the hiving off Institut Jantung Negara to Sime Darby Bhd., there is a story that deserve the attention on how the life of someone who has contributed immensely to society is being gambled because of the demands of capitalism supersedes the importance of making a social and humanitarian decision.

Hashim Hussain “Prof” Yaacob, was a former senior lecturer of sociology and developmental economics at USM for years, throughout its formative and developmental stage, till he was unjustly and abruptly terminated and dismissed by then Vice Chancellor Dato’ Musa Mohamad. Hence, he lost his pension and all the medical benefits a senior government servant usually enjoy for the rest of their lives.

hashim2

Now at 60 and suffering from acute diabetes, he is diagnosed for acute triple arterial blockages, between 95-100% and due of coronary arterial by-pass graft surgery (CABG or “cabbage”) at IJN on Monday. That is something that will easily cost slightly more than RM 50,000.00.

Hashim does not have that kind of money. Infact he has no savings. Since the dismissal, Hashim, who is single and never been married, has been doing odd jobs and projects on adhoc basis, to earn a living.  A simplistic man who practices the socialistic life he professes, he now face a juncture where the system might not have social justice after all. The challenge for the moment is how can he raise that kind of cash, in less than seven days.

He is an Old Putra. He used to enjoy being in the company of now, men in illustrious capacity, mostly in the corporate world. Malaysia Airlines Chairman Tan Sri Dr Munir Majid, Peremba Chairman Tan Sri Razali Abdul Rahman, CIMB Chairman Tan Sri Mohd. Nor Yusof and former Chief of Armed Forces Jen. (B) Tan Sri Mohd. Zahidi Zainuddin, were all his batch mates, if not Company mates when they were in the Royal Military College (Class of ’64). Even Malaysia Airlines Managing Director Dato’ Seri Idris Jala and MARA Chairman and former Terengganu Menteri Besar Dato’ Seri Idris Jusoh were his students in USM. So are other great men and women, who have benefited from his tutelage and explicitly sharing of thought process. To many who have had the opportunity to pick his brains, like yours truly, Hashim has social issues especially poverty high on his agenda, close to his heart and never shy to speak his mind of.

Money had always been scarce for Hashim. More over now, the state where he gravely needs financial assistance for his very big surgery, in seven days time. This is the time where Hashim is challenged by the system what his own ‘Perjuangan’ stood for, all these years.

All of these facts are even before IJN is being taken over by Sime Darby. Managing a very exclusive and luxurious hospital SJMC in Subang Jaya, heart patients have been known to be turned away because the surgeons ‘prefer’ not to do “complicated cases”. It makes business sense because as a capitalist entity, mortality would not be good for ‘marketing plans’. Impeccable post-CABG survival rate will have very strong co-relations on the admission of further patients, especially amongst the ‘haves’ and those who are admitted with ‘guarantee letters’. This something most probably is in the top most priority the minds of corporate planners and strategists like Hisham Hamdan.

At least now, Hashim is having a life fighting chance when IJN is willing to treat him. The challenge is now to get the funds where else the appointment date has been made. Otherwise, in the management of a capitalistic entity with profit as the top most agenda, most probably Hashim will not even get a chance to be evaluated for the decision to have surgery.  The popular wager now would be, when Sime Darby takes over IJN, Hashim-like surgeries would cost a lot more than RM 50,000.00!

Would there be more of Hashims if and when IJN is being Sime Darby-ised into a capitalistic medical facility, with profitability is high on the priority Vs preservation of life?

SAVE HASHIM! SAVE IJN!

God bless and God speed…………….

*Updated 6 Jan 2009 1300hrs

More information about Hashim on Gurindam Jiwa blog. Any kind donours are welcomed to bank any contribution to Hashim Hussain Yaacob’s Maybank account 112183-125555

*Updated 9 Jan 2009 1215hrs

A CIMB account has been opened under the name of “Mohd. Nor Yusof” (A/C. No. 14170024244050) by Old Putras to help Hashim fund his triple CABG surgery, due next week. It will be active for ONLY 8 WEEKS starting today. Contributions and donations are most welcome.

God bless everyone who chipped into helping Hashim out.

Published in: on January 5, 2009 at 23:45  Comments (16)  

Sime Management 101: Make them accountable

Sime 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 only they sacked the executives who are responsible to manage these miserably failed projects and some were even handed to authorities for a more detail investigation and eventually prosecution, Sime Darby is now making them pay for their sins.

This morning’s Business Times:

Sime sues ex-CEO, 4 others

Published: 2010/12/24
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Sime Darby is claiming at least RM338 million from the five over their alleged roles in the RM1.7 billion losses suffered by its energy and utilities division this year.

Conglomerate Sime Darby Bhd has sued its former group chief executive officer Datuk Seri Ahmad Zubir Murshid and four senior executives over their alleged roles in the massive RM1.7 billion losses suffered by its energy and utilities (E&U) division this year.

The executives, all under the E&U division, are former Sime Darby Energy Sdn Bhd vice president Datuk Mohd Shukri Baharom, chief financial officer Abdul Rahim Ismail, head of oil and gas Abdul Kadir Alias and senior general manager of Sime Darby Engineering, Mohd Zaki Othman.

“They are being sued for breaches of duties owed to the Sime Darby Group.

“The Sime Darby Group is claiming from the defendants, inter alia, restitution for monies wrongfully paid out, damages for losses suffered, loss of profit, aggravated damages and costs,” it said in a statement yesterday.

Zubir and the other executives could not be reached for comment.

Sime is claiming at least RM338 million from the five, with almost half of that from Zubir and Shukri. It is also seeking damages for losses caused by them in three projects and any aggravated or exemplary damages.

Specifically, the suit deals with three projects, namely the Bulhanine and Maydan Mahzam project with Qatar Petroleum, the Maersk Oil Qatar project and building of marine vessels for the Maersk Oil Qatar project.

The suit was filed at the Kuala Lumpur High Court yesterday.

Sime recorded RM1.7 billion in cost overruns for the three projects and the Bakun hydroelectric dam project earlier this year, causing it to allocate a RM2.1 billion provision.

As a result, the government-linked company in July established an investigative reports review committee, carried out a forensic audit and appointed legal advisers.

Zubir was asked to take a leave of absence in May and the following month, Datuk Mohd Bakke Mohd Salleh was named acting president and group CEO.

The extra costs led Sime to post losses in the third quarter to March 2010, its first quarterly loss since its mega merger with state-owned Golden Hope Plantations Bhd and Kumpulan Guthrie Bhd in December 2007.

Losses dragged on to the fourth quarter ending in June 2010 but Sime continued to be profitable for the full year and has bounced back with a first-quarter profit for fiscal 2011.

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This is an unprecedented move by a plc to ensure that not only their executives are made accountable and responsible to manage the resources that were entrusted upon them by the investors, they are now liable for their mismanagement. Especially if their mismanagement has a tinge of criminal intent, of which should be a good deterrent for the temptations of corrupt practices amongst corporate leaders.

Sime 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 month’s AGM. Deputy Chairman Tun Ahmad Sarji Abdul Hamid, Director-in-charge-of-SDE Tan Sri Dr. Tajudin Ali and former Sime UEP MD who has been appointed to the BOD Dato’ Mohamed Sulaiman were ‘retired’.

Other BOD members who volunteered to leave were Former PWC Executive Chairman Raja Tan Sri Arshad Raja Tun Uda, Dato’ Dr Abdul Halim Ismail, Dato’ Paduka Zaitoon Osman and Ariffin Siregar.

We reckoned that the retirement of these three plus four others were not enough. Sime Darby owe it to the public, especially Malaysians. Their highly illustrious BOD should have been more vigilant and ‘getting wiser after the event’ is not acceptable, considering the experience, systems and controls and tradition of a conglomerate of several plcs wich serve as pillars of Kuala Lumpur Composite Index (many regard this as the simplistic ‘barometer’ for the economic health of the nation).

One personality was spared: Chairman of the Group Tun Musa Hitam. He should also leave. It is a matter of principle. Of course one should also take into account that he explicitly did not consider to promote sacked-with-shame Former President and Group CEO Dato’ Seri Ahmad Zubir Murshid’s successor from someone within, probably because of ‘ego and personality clashes’. If so, it is ashame because there are streams of very experienced and proven talents within was denied when the CEO was brought in from outside the conglomerate of 100,000 employees.

Until today, Sime Darby has not made public of its ‘Forensic Audit’. Earlier Sime Darby announced that the excuse was they wanted “To recover these or part of these losses” as a move to give comfort to the stakeholders, especially the investors where more than 7 million Malays and Bumiputras have their life savings locked under PNB’s ASB and ASN schemes. For the rest of Malaysians, they have part of the EPF locked in the form investment as well.

Officially, Sime Darby kept mum about the ‘Forensic Audit’. It was thought that they were going after the JV partners, consultants, contractors and suppliers to ‘recover’ these losses. It is believed also that all the material evidence would be mitigated when they go after the said parties. If eventually they do, it should be a lengthy legal process and circus stunts expected.

It is practically doubtful that Sime Darby is able to recover all or most of the RM 338 million claim  from these five former executives. The ‘Statement of Claims’ is a ravishing read; Part 1 and Part 2. However, the positive and favourable outcome of this case would serve a stern warning for errant executives or those entrusted as stewards but instead having personal agenda to be realised by ill-intent. In the words of Sime Darby’s own, “It is a matter of principle”.

A few things learnt from this episode. Make the executives pay for their sins, look for talents from outside because of an ego and allow the ‘Statesman’ to remain, especially after he was said to have “Mellowed down and learnt a valuable lesson”. That is from now on should be known as ‘Sime Management 101’ and should be a compulsory subject to all second year business courses.

Published in: on December 24, 2010 at 08:39  Comments (10)  

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)  

Slaughtering the Sime

Yesterday afternoon, Sime Darby Bhd. Chairman Tun Musa Hitam called for a media conference to announce  Group CEO Dato’ Seri Ahmad Zubir Mursyid’s “leave of 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 ago.

BizStar reports:

Friday May 14, 2010

Sime President and CEO Zubir removed

By RISEN JAYASEELAN
risen@thestar.com.my

The high-profile removal is linked to Qatar and Bakun projects’ cost overruns

PETALING JAYA: In what is seen as the first high-profile removal of the head of a government-linked company, Sime Darby Bhd’s board of directors has asked its president and group chief executive Datuk Ahmad Zubir Murshid to take a leave of absence prior to the expiry of his contract on Nov 26, 2010.

Sime Darby chairman Tun Musa Hitam said at a press conference yesterday afternoon that Zubir’s leaving was in connection with the cost overruns that the group’s energy and utilities division had suffered in carrying out projects in Qatar and the Bakun hydro-electric dam.

Datuk Azhar Abdul Hamid, currently head of Sime Darby Plantations, has been appointed as acting group chief executive.

Sime Darby also said it would take a hit of RM964mil in its second half earnings from losses from its energy division.

From left: Datuk Seri Panglima Andrew Sheng, Tun Musa Hitam and Datuk Azhar Abdul Hamid at the press conference on Thursday

Musa said the problems in this division first surfaced when the board was performing its functions in the last six to seven months. “We discovered that there were a few questionable positions in relation to the financial status of the company and the application of corporate governance. We then decided to look further and realised that there was cause for curiosity in the energy and utility division,” he said.

Musa added that the board then formed a working group in October 2009 to look into the matter. The work group, which is still looking into the issues, consists of Datuk Seri Panglima Andrew Sheng, as chairman, Tan Sri Wan Zahid Noordin and Datin Zaitoon Othman.

It is advised by external lawyers Ashurst, Rajah and Tann and Zaid Ibrahim & Co as well as the accounting firms of Deloitte and KPMG

The work group then found that one particular project needed more attention.

Subsequently, a comprehensive investigation was conducted and it was discovered that the problems involved two or three other projects, Musa said.

“The group worked with seriousness, determination and thoroughness that was demanded of them. They did a tremendous job,” Musa said.

Musa said the board had assessed the “damages” caused by this division and, in the interest of good corporate governance, identified the individuals that were responsible and accountable for these losses. “It is not appropriate for us to list out everyone concerned and the whys and hows of what went on. But this is the basis of our decisions,” he said.

When asked if this meant Sime Darby was firing Zubir, Musa said: “The fact is, he has left as of today. It is up to you how you want to interpret that.”

Sime Darby was also asked if there was a breakdown of risk management within the group. Musa said the same question had been raised in the working group as the Bakun project had stated in 2002, while the Qatar projects first began in 2005. “But note that these are very long and complex technical projects. But we do acknowledge that there should have been better controls in place.”

Sheng, who is also a Sime Darby board member, said there were valuable lessons to be learnt from this episode. “We have given instructions to the management to strengthen controls and manage all operations in the most prudent and efficient manner.”

Musa added that the board was looking at making changes to the management structure of the group to ensure that better corporate governance was adhered to.

On whether any fraud has been detected or criminal charges filed against any Sime Darby employees, Musa said that would depend on the findings of the working group and their special consultants, which is still “work in progress.”

Azhar added that Sime Darby would be obliged to follow up on the appropriate course of action based on the findings of its investigations.

The RM964mil provisioning that will take place, is made up of losses of RM200mil from the Qatar Petroleum project, RM159mil from the Maersk Oil Qatar project, RM155mil from a project to construct vessels for use in the latter project and RM450mil from cost overruns in the Bakun project.

Kenanga Research, in a note yesterday evening, reversed its rating on Sime Darby from a hold to a sell, noting that the announcement was “extremely negative” as the provisioning was “much larger than what the investment community had been forcasting.”

“The lack of controls in such a large GLC is nothing less than shocking,” the report stated.

Kenanga estimates Sime Darby’s full year FY2010 net profit to come down to RM1.74bil versus its previous projection of RM2.5bil.

Ivy Ng, senior regional analyst at CIMB Investment Bank shared the same view that Sime Darby’s provisions are bigger than what CIMB had expected. “So that is negative. Furthermore, the change of management is only marginally positive as they have not named who will be their permanent CEO,” she said.

A glimpse of Sime Darby’s cost overruns in its energy and utilities division:

  • Qatar Petroleum project – delays and cost overruns which resulted in losses on the project exceeding RM500mil, which have already been accounted for. The board has decided to reverse the revenue of RM200mil previously recognised in FY2009.
  • Maersk Oil Qatar project – delays and cost overruns have resulted in foreseeable losses of RM526mil for FY2010. Of this, RM367mil has already been recognised in the first half FY2010 and the board has decided to recognise the remaining RM159mil.
  • Contruction of vessels for use in the Maersk Oil Qatar project – the board estimates the project may result in losses of about RM155mil.
  • The Bakun hydroelectric dam project, in which Sime Engineering Sdn Bhd holds a 35.7% effective interest – management estimates that there could be a potential additional cost attributable to the group in the FY2010 results of RM450mil.
  • *****************

    The board of directors (BOD) met for a marathon of 13 hours on Wednesday, going through a barrage of audit reports to understand the real situation and the true extend of the damages that all these scandals have dragged Sime Darby financially, morally and even trying to minimally guess the erosion of the general public opinion. The conglomerate which was formed with merger of three separate conglomerates in 2007 now boast to be the largest oil palm and rubber plantation in the world.

    Personalities that sit in the BOD are non other but high acclaimed individuals, with an impeccable mixture of vast of experiences in public service, corporate world and professional services. The Chair is occupied by Fifth Deputy Prime Minister Tun Musa Hitam and other members are PNB Chairman and former Chief Secretary to the Government Tun Ahmad Sarji Abdul Hamid, former Chief Secretary to the Government Tan Sri Shamsuddin Osman, Former Director General of Education Department Tan Sri Wan Mohd Zahid Wan Noordin, former TNB Chairman Tan Sri Ahmad Tajuddin Ali, shipping tycoon Tan Sri Dato’ Panglima Andrew Sheng, former Price Waterhouse Coopers Executive Chairman Raja Tan Sri Arshad Raja Tun Uda, Former CEO of Bank Islam Bhd. Dato’ Dr. Abdul Halim Ismail, former Sime UEP CEO Dato’ Sri Mohamad Sulaiman and renowned lawyer Datin Paduka Zaitoon Dato’ Othman. British national Dato’ Henry S. Barlow and former Indonesian Central Bank Governor Dr .Ariffin Mohamad Siregar are the two non Malaysian in the BOD. Of course Zubir sits in the BOD also.

    It was said that the BOD was “Misled about the Qatar project” and “Kept from the true information”. It was also said that the BOD was told that “The Qatar project failed because of ‘variation order'”. The truth is that, people in the industry had been talking about the ‘mismanagement and fraud’ in the near-billion-Ringgit scandal.

    It is clear that the reporting system and the independent audit committee within the Sime Darby BOD is not effective. The nation can no longer have large corporations like this be marred by scandals and loss making ventures. It must not be good for PM Dato’ Seri Mohd. Najib Tun Razak’s agenda of the ‘New Economic Model’ for the Malaysian economy per capita to expand by double in 10 years time and lure in human capital and FDIs, to complement this growth and objective set.

    Probably it is time the Sime Darby BOD look into the recent acquisitions of Sime Darby Group, such as Sapura Auto, Auto Europecar and Asia Pacific Institute Information Technology (APIIT) . Sime Darby can’t possibly dwell into any more scandals and financial quangos. People on the street still talked about how Sime Darby went into banking in the 1990s when they took over Sime Bank from UMBC and that turned out to be a very bad experience, even for regular unit trust holders of ASB.

    The ‘dismissal’ of Zubir alone is deemed inadequate, especially from the ‘accountability’ and ‘transparency’ perspective. If the BOD had been “misled and kept away from true information”, then Zubir could not possibly have acted alone. BOD should do a comprehensive investigations to ‘witch-hunt’ every single person who had the knowledge about all these but decided to keep ‘mum’ about it.  We expect to see more heads be chopped of, either at Sime Darby BOD, SDE BOD, SD Energy and Utilities and executives at all three companies.

    Again its spring time in the northern hemisphere. ‘Spring Cleaning’ is timely. Sime Darby Bhd. as a group would have to do a lot to recover the confidence which has been marred and grossly eroded.

    *Updated Friday 14 May 2010 0800hrs

    Published in: on May 14, 2010 at 00:00  Comments (20)