Tuesday, October 5, 2010

Azmin Ali Biadab!

Calon Timbalan Presiden Parti Keadilan Rakyat Azmin Ali merujuk kepada negarawan Tun Dr Mahathir Mohamad sebagai orang yang dah "tersungkur di Australia". Pemimpin yang sebegini lah yang kita ada dalam PKR! Cukup kurang ajar dan rendah martabatnya!

Biadab! Manusiakah Azmin ini?

P.S. Saya berdoa Tun Dr Mahathir akan cepat sembuh dan kembali ke tanahair secepat mungkin.

Tuesday, September 21, 2010

Sime Darby's forensic audit report will not be made public

Sime Darby Berhad has informed Bursa Malaysia that it does not intend to make public the forensic audit report on losses incurred by the group, which now runs into billions of ringgit.

In a filing to the bourse last night, Sime Darby admitted "possibilites of breaches of duties and obligations, and inappropriate conduct on a prima facie basis."

Here's the full Bernama report:

KUALA LUMPUR, Sept 20 (Bernama) -- Forensic and legal consultants have completed investigations into Sime Darby Bhd's projects in the energy and utilities division and submitted reports today to the conglomerate's board.
Four key projects being investigated are the Bulhanine and Maydan Mahzam project with Qatar Petroleum, the Maersk Oil Qatar project, the Bakun hydroelectric dam and the Marine Project.
In a filing to Bursa Malaysia today, Sime Darby said the investigations revealed possibilites of breaches of duties and obligations, and inappropriate conduct on a prima facie basis.
It said the board had resolved to initiate legal proceedings and had lodged reports with the relevant authorities.
The board has been advised to keep details of the report confidential and nature of such proceedings so as not to adversely affect the interest of the group.
On May 27, Sime Darby's energy and utilities division reported an operating loss of RM1,019 million for the first nine months ended March 31, 2010.
This was after recording provisions for the oil and gas and engineering sub-segments which amounted to RM964 million that was announced on May 13.

I find it utterly ridiculous that Sime Darby has saw it fit not to reveal the findings to its shareholders. Sime Darby is a GLC and it is dealing with public funds.

I hope Sime Darby's shareholders attending the company's AGM on Nov 16, will demand that the report is made public.

Tuesday, September 14, 2010

Kenapa kes kehilangan yang lain masih tergantung? PDRM perlu jelaskan.

Seperti rakan-rakan blogger lain, saya juga ingin mengucapkan tahniah kepada Polis di-Raja Malaysia (PDRM) kerana telah berjaya membuat beberapa penahanan dalam kes membabitkan kehilangan jutawan kosmetik Datuk Sosilawati Lawiya dan tiga rakannya.

Tetapi hati kecil saya masih tertanya-tanya kenapa PDRM tidak dapat menyelesaikan kes kehilangan empat orang lain (dan mungkin lebih) yang kini diuar-uarkan oleh PDRM sendiri bahawa ianya mungkin ada kaitan dengan suspek-suspek yang sama. Malah, kes-kes ini dilaporkan lebih awal dari kes Datuk Sosilawati.

Saya khuatir umum akan beranggapan kes-kes ini tidak diberi keutamaan kerana ia tidak membabitkan individu berstatus tinggi?

Saya terkejut juga apabila membaca akhbar The Star dan New Straits Times hari ini (Sept 14) yang memetik isteri kepada salah seorang mangsa bahawa beliau telah membuat laporan polis kali KEDUA pada Sept 8, 2010. Malah, laporan itu dibuat di balai polis Banting.

M. Usharani datang ke Malaysia dari Chennai, India untuk mencari suaminya A. Muthuraja yang didakwa hilang setelah berjumpa dengan kedua-dua peguam yang juga suspek dalam kes Sosilawati. Kali terakhir beliau bercakap dengan Muthuraja ialah apabila Muthuraja berada di rumah suspek.

Saya hairan kerana walaupun sudah ada "lead", polis tidak dapat menyelesaikan kes tersebut. Persoalannya sekarang ialah apakah polis telah mengambil keterangan dari peguam-peguam tersebut dalam kes kehilangan Muthuraja? Bukankah ianya "Standard Operating Procedure" pihak polis untuk mengambil keterangan daripada mana-mana pihak yang terakhir sekali berada bersama mangsa?

Jika kes Muthuraja telah diselesaikan dengan penangkapan, MUNGKIN tragedi yang menimpa Datuk Sosilawati, pemandunya, peguamnya dan pegawai banknya dapat dielakkan.

PDRM perlu juga memulakan satu penyiasatan dalaman untuk mengetahui apa tindakan yang diambil (atau tidak diambil) diatas laporan yang dibuat oleh Usharani. Ini membabitkan nama baik PDRM dari kacamata antarabangsa.

Friday, September 3, 2010

Corruption cases: Why they just don't seem to stick?

Is there a serious flaw with the way corruption cases are being prosecuted? Are there anomalies in the law which make it technically easy for the accused persons to be let off the hook easily?

I raise these questions because it seems to me that far too many cases, especially high profile cases involving the Malaysian Anti-Corruption Commission (MACC) are being thrown out of court. If the subordinate court finds an accused guilty, the superior court takes an opposite position.

The latest being the acquittal of former Ampang Jaya Municipal Council (MPAJ) enforcement director Capt (R) Abdul Kudus Ahmad and former Pahang State Exco member Datuk Omar Othman. I am not suggesting that both of them are guilty or that they should have been found guilty. But it is rather surprising that in the case of Abdul Kudus who was charged with 30 counts of corrupt practices, not even a single charge stuck!

Datuk Omar was acquitted after a six-year trial. He was charged with abusing his power to award two village road projects to a company he allegedly had interest in.

After six years of trial (and a lot of tax payers' money, including mine spent), he was released.

I think the number of high-profile corruption cases which ended up in acquittals in recent years are far too many for to me to list down here. Given the frequency of these cases being thrown out of court, I wonder what is MACC's actual success rate of convictions after all avenues of appeal are exhausted.

And a bigger wonder is whether the investigation methods used by the MACC are in fact effective.

Wednesday, September 1, 2010

Stop intimidating bloggers!

Have our authorities lost their sense of humour? Or is this an attempt by the Attorney-General and Malaysian Communications and Multimedia Commission (MCMC) to intimidate bloggers.

I am referring to blogger Hassan Skodeng who will be charged at the Petaling Jaya sessions court tomorrow for poking fun at Tenaga Nasional Berhad and Earth Hour. Now it is also a crime to make jokes.

I have reproduced below what Hassan wrote, and let me make it clear that this is a joke...a parody, in case they decide to charge me too for reproducing the blogpost.

By Hassan Skodeng
TNB to sue WWF over Earth Hour

KUALA LUMPUR — Tenaga Nasional Berhad (TNB), Malaysia’s premier energy provider today announced that they were taking legal action against the World Wildlife Foundation (WWF) for organising the Earth Hour, a global movement that makes a stand against climate change by turning off all non-essential lights and electrical equipment for an hour every year.

In a Press conference, TNB president and CEO Dato’ Sri Che Khalib Mohd Noh said that the annual worldwide symbolic gesture, which this year would be observed this Saturday at 8.30pm, is nothing more than an ‘arrogant and thoughtless viral movement’ aimed to hurt power companies such as TNB.

CHE KHALIB: These people are inconsiderate. “Obviously these green-minded fellows think they’re really cute, organising such an irresponsible campaign,” said Che Khalib angrily. “They say ‘turn off your lights for an hour’ and people do. I bet that really makes them feel all powerful.

“What these western colonialists fail to grasp is how such drastic action affects the poor companies like us. One hour of unused electricity means an hour of wastage for TNB. Did you know that last year’s Earth Hour costed us millions in unrealised revenue?” asked Che Khalib, seething.

“How do you think that affected our production? We couldn’t exactly turn off our power plants just because a large number of Malaysians turn off their lights at the same time. So imagine all that wasted energy.

“This year, we expect even more people to fall for this global con-job,” added Che Khalib.

“So there’ll be more lights turned off. KL alone would be engulfed in darkness. Yes, sure, it may seem fun to some, running around in complete darkness. But that also means TNB would get less money. Tell me, what am I supposed to say to the kids of this electrical technician when we can’t give bonus this year?” asked Che Khalib, as he pointed to a TNB staff manning the lights for the Press conference.

He added, “In light of such inconsiderate actions by these tree huggers, TNB has no choice but to take legal action against the Earth Hour organisers, WWF. We’ll wait for our accountants to come back with the loss figure after this year’s Earth Hour, and we plan to sue them for that same amount. We may even add a hundred million ringgit or so, to teach them a lesson.”

Che Khalib also reminded Malaysians to ignore the Earth Hour, calling it a ‘cultural invasion, a concerted assault by extreme liberal forces aimed to destabilise poorer nations’.

“We are Malaysians, and we should be proud of our lights. Every night we should go out and see the beautiful sparkling lights in our city skylines. Don’t be ashamed of the lights,” said Che Khalib, as he unveiled a set of pictures showing the Petronas Twin Towers and the surrounding buildings consequently going dark during last year’s Earth Hour.

God knows how many people tripped over things and hurt themselves in the complete darkness, not to mention the number of bad people going around doing naughty things, knowing the authorities could not see them.

“Let’s reverse the order of these pictures this year, and fight for the rights to our lights,” continued Che Khalib. “Let’s unite as 1Malaysia, and tell these green terrorists that we will not go dark! We will not switch off! Let’s tell them that we love our lights!

“POWERRR… EXTREME!” he screamed, as powerful clusters of foglamps flooded the conference room with ultra-bright and hot light, temporarily blinding everyone present, and signalling the end of the Press conference.

Thursday, August 26, 2010

Siapa dalang di sebalik demonstrasi di Jakarta?

Kita semua tahu hakikatnya. Di Indonesia, dengan wang sebanyak RM100, kita boleh mengupah seramai 10 orang untuk menganjurkan satu demonstrasi mengenai apa saja isu.

Bermakna dengan RM50,000 kita boleh mendapat 5,000 orang untuk mengadakan satu demonstrasi besar-besaran. Dalam erti kata lain, kalau ada pulus, semua beres.

Sebab itu bila ditanya, majoriti yang melibatkan diri tidak tahu pun apa tujuan sebenar demonstrasi itu diadakan.

Tapi persoalannya sekarang siapakah dalang yang membiayai demonstrasi di hadapan Kedutaan Malaysia di Jakarta serta Konsulat Malaysia di Pekan Baru dan Medan?

Kita pasti boleh mendapat jawapannya sekiranya kita mencongak dari persoalan pokok ini:

Siapakah sebenarnya yang mahu melihat Malaysia dan Indonesia bermusuhan?

Apapun, rumusannya ialah kumpulan penunjuk perasaan di Jakarta yang memijak Jalur Gemilang dan membuang najis manusia kedalam kawasan Kedutaan Besar Malaysia di Jakarta, cukup kurang ajar dan tidak bertamadun. Kemungkinan besar mereka mendapat bayaran lebih sedikit kali ini kerana terpaksa bersusah payah mengumpulkan najis manusia dan sanggup menggunakan tangan untuk menyapu najis itu ke dinding Kedutaan.

Dengan wang ringgit, semuanya boleh dibeli. Bisa saja!

Thursday, August 19, 2010

Sime Darby's Forensic Audit Report please?

Today is the 19th day of August, 2010. Still no sign of the forensic audit and internal investigations report on Sime Darby Berhad's RM2 billion plus losses.

On June 15, Sime Darby chairman Tun Musa Hitam said:

"We will make the relevant disclosures as soon as the third phase or the forensic audit and legal investigations are ready, which are expected to be around the end of August 2010."

To be fair, Tun Musa did say "end of August". That gives him about 10 days more.

As I wait anxiously for the audit report, I wonder whether it will recommend punitive action against the entire Board of Directors as well as several senior management staff for their role in misleading the Government, the shareholders and the public in general:

To my mind, besides the Board, the following senior executives should be held answerable:

1. Sekhar Krishnan - The Group Financial Officer when Sime Darby ventured into Qatar and when the whole fiasco began.

2. Hisham Hamdan - The former Head of Group Stategy and Business - he vets through all investments. If he says no go, papers do not go to Board. All projects, including the Qatar projects and Bakun were okayed by him. He did not see the fact that Sime Darby was not ready for the projects in Qatar. It is strange that he is now tasked to lead Energy and Utilities Division.

3. Madam Tong Poh Keow who was appointed the Group Chief Financial Officer of Sime Darby Berhad on June 24, 2008 - She was Group CFO for year end June 2008 and June 2009 accounts - why did she failed to insist on provisions? Why did she sign the Statutory Declaration in the annual report saying that the accounts were correct?
In an Annual Report, the directors sign the Statement of Directors (s169(15)Companies Act). The CFO signs Statutory Declaration (s169(16) Companies Act) in accordance with Statutory Declaration Act 1960. So what is the CFO's legal position in making incorrect statutory declarations? In an Annual Report, the key sections are:
1) Corporate Governance Statement
2) Chairman's Statement - Nothing was mentioned in Tun Musa's statement in June 2008 and June 2009 in relation to E&U Division
3) Audit Committee Report
4) Statement of Internal Control - contains Board responsibility, risk management framework, etc
5) Directors' Report

Were the representations in the above sections accurate or misleading?

Since Annual Reports are tabled at the Annual General Meeting for shareholders, the Sime Darby shareholders, public at large, the Securities Commission, Bursa Malaysia, Minority Shareholders' Watchdog Group, etc were obviously misled. This is an obvious breach of the Companies Act.

4. Nik Muhammad Hanafi Nik Abdullah who was then Sime Darby's Head of Internal Audit. He failed to question the Finance and Accounts Department when it did not make provisions for the losses.

6. Foo Marn Hin, the former Head of Sime Darby's Risk Management. He was Head of Risk Management when Sime Darby venture into Qatar. He failed to warn the company about the risks involved in the Qatar projects, given the fact that Sime Darby lacked the experience and the expertise to venture into such projects at that point of time.

5. Abdul Rahim Ismail, who was then the Chief Financial Officer of the Energy and Utilities Division. He should have known all along the extent of the damage.

Friday, August 13, 2010

More on Anwar, Wolfowitz and Al-Gore

My friend Pasquale has more about the unholy alliance of Anwar Ibrahim, Wolfowitz and Al Gore here

Thursday, August 5, 2010

Anwar, Al Gore, Wolfowitz - birds of a feather!

Birds of a feather flock together. Just like ex-convict Anwar Ibrahim, both Al Gore and Paul Wolfowitz are tainted with scandals and therefore lack the credibility to even try to make each other look good. In other words, they lack moral ground.

So I am sure, those who read the joint article by Al Gore and Wolfowitz in the Wall Street Journal on Aug 3 asking their Government to interfere in the Anwar Ibrahim sodomy trial would have simply laughed it off.

Wolfowitz, as we know, had an adulterous affair with his staff Shaha Riza and rewarded her for her "services" with a handsome pay package. He had to beg and plead to keep his job as World Bank President.

Al Gore also had his fair share of scandals. At least two more women have come forward claiming that they were sexually abused by the former Vice President.

Shortly following the announcement that he was divorcing Tipper, his wife of 40 years, Star Magazine reported that Gore was in the midst of a 2-year affair with Laurie David, the ex-wife of Larry David.

Then came the sexual assault allegations. Massage therapist Molly Hagerty accused Gore of sexually harassing her in Portland, Oregon, four years ago -- and she showed off her semen-stained pants on the cover of the National Enquirer to prove it. Gore emphatically denied her allegations.

Hagerty reported the incident to the authorities in 2006, and again in 2009, but they closed the case. Earlier this month, the Portland police reopened the investigation.

And now, two unidentified women -- both massage therapists -- claim that Al Gore made some unwanted advances towards them.

And in Anwar's case, although the Federal Court had in 2004 overturned the sodomy charge against him due to technicalities, the court held that there was evidence confirming that Anwar did engage in homosexual activities.

Given these scandals, it seems comical to me that both Wolfowitz and Al Gore have come together to support Anwar. And they even have the gall to say that Anwar's sodomy charges are "trumped up".

Denying their scandals at all cost is all they can do now! And for that, they need each other's help.

Sunday, July 25, 2010

Kalimullah and the plot to topple Najib?

Apakah bekas Ketua Pengarang The New Straits Times Press Datuk Kalimullah Hassan bersekongkol untuk menjatuhkan Dato' Sri Mohd Najib Tun Razak apabila beliau menjawat jawatan Timbalan Perdana Menteri dan Menteri Pertahanan.

Berikut laporan penuh yang disiarkan Mingguan Malaysia hari ini, 25 Julai 2010:

Kalimullah didesak jelaskan plot jatuhkan Najib

KUALA LUMPUR 24 Julai - Ahli Dewan Tertinggi Pertubuhan Pribumi Perkasa Malaysia (Perkasa), Mohd. Zahid Md. Arip meminta tokoh media, Datuk Seri Kalimullah Hassan supaya menjelaskan kaitannya dalam plot menjatuhkan Datuk Seri Najib Tun Razak semasa menyandang jawatan Timbalan Perdana Menteri dan Menteri Pertahanan.

Dalam temu bual bersama TV3 yang disiarkan menerusi Buletin Utama malam ini, Mohd. Zahid mendakwa, Kalimullah dipercayai mempunyai kaitan dalam plot itu.

Ini kerana, dakwanya, Kalimullah menyiarkan artikel yang tidak tepat semasa menerajui The New Straits Times Press Berhad (NSTP), mengenai bahan letupan C4 yang digunakan dalam kes pembunuhan model warga Mongolia, Altantuya Shaariibuu pada 2006.

"Dalam artikel itu, C4 ini kononnya hanya dimiliki oleh Angkatan Tentera Malaysia (ATM) dan perlu kelulusan tertinggi Kementerian Pertahanan.

"Berita ini tidak tepat kerana kita tahu bahan letupan ini juga ada di semua depot senjata Polis Diraja Malaysia (PDRM) dan penggunaannya tidak memerlukan kelulusan tertinggi.

"Kalau Kalimullah tidak mahu bertanggungjawab, tidak mahu menjawab, dan berdiam diri, dia jangan marahkan saya. Seluruh rakyat percaya beliau salah seorang yang merancang plot untuk menjatuhkan Najib ketika itu dan agenda itu berterusan sehingga sekarang," dakwanya seperti disiarkan dalam Buletin Utama itu.

Hari ini, Utusan Malaysia menyiarkan kenyataan Mohd. Zahid yang juga bekas Naib Ketua Angkatan Muda Keadilan Parti Keadilan Rakyat (PKR) mempersoalkan penafian Kalimullah kononnya beliau tidak pernah mendapat sebarang kontrak kerajaan sebelum bergelar jutawan.

Mohd. Zahid dilaporkan berkata, beliau hairan dengan penafian itu kerana dakwanya, VPI International iaitu anak syarikat kepada Efficient E Solutions yang mana Kalimullah merupakan pengarahnya, memperoleh kontrak bernilai RM216,090,927 daripada Lembaga Hasil Dalam Negeri (LHDN) pada September 2005.

Sedangkan, tambah Mohd. Zahid, dalam penafiannya baru-baru ini Kalimullah memberitahu hanya melepaskan jawatan sebagai pengarah di Efficient E Solutions pada 21 Jun 2006 iaitu selepas sembilan bulan kontrak diluluskan.

Sehingga malam ini, Kalimullah belum memberikan sebarang ulasan berhubung desakan Mohd. Zahid itu.

Kita masih menunggu penjelasan Kalimullah.

Thursday, July 22, 2010

Kali oh Kali

Datuk Kalimullah Maseerul Hassan told Bernama yesterday:

"I am also not a director of Efficient E Solutions which I quit on June 21, 2006. I did not get any government contract in my life and am not a shareholder in VPI International," he said in response to allegations by Jaringan Melayu Malaysia (JMM), a non-governmental organisation (NGO)".

He said this in a statement denying that he was behind the funding of The Malaysian Insider, a news portal highly critical of the Government and the Monarchy.

But according to Jaringan Melayu Malaysia, the contract was from 2005 to 2010. This means, when the decison to award the imaging and data capture scanning service contract to VPI International Sdn Bhd by the Inland Revenue Board was made, Kalimullah was still a director of Efficient E Solutions.

Efficient E-Solutions then held a 20 per cent stake in VPI International.

I have lifted the following information from APANAMA.

How low can one go?

Wednesday, July 21, 2010

No Government projects, Kalimullah?

According to journalist turned multi-millionaire Kalimullah Maseerul Hassan, he did not get a single Government project in his entire 50+ years of life. At least that is what he told Bernama in a statement denying that he has any links with the news portal The Malaysian Insider.

This is the Bernama story in full:


KUALA LUMPUR, July 21 (Bernama) -- Journalist-turned-businessman Datuk Kalimullah Hassan today stressed that he had never been involved with 'The Malaysian Insider', a news portal, in any way.

"I am also not a director of Efficient E Solutions which I quit on June 21, 2006. I did not get any government contract in my life and am not a shareholder in VPI International," he said in response to allegations by Jaringan Melayu Malaysia (JMM), a non-governmental organisation (NGO), yesterday.

JMM alleged that the backers of the news portal had defamed the government although they had profited from government contracts.

JMM's allegation was based on an inference that Efficient E-Solutions held a 20 per cent stake in VPI International, which won an imaging and data capture scanning service contract from the Inland Revenue Board.

Kalimullah said: "If JMM has evidence of wrongdoings, it should, as a responsible NGO funded by well-meaning Malaysians of high standing, hand over the evidence to the authorities, without further delay."

He also hoped that BERNAMA, as the national news agency, "of which I was once chairman, would act responsibly in future and verify such allegations before publishing them." - BERNAMA.

Yes Kali, we believe you! We are naive Malaysians. By the way, we also believe in the Tooth Fairy.

No point denying it when everyone knows that your friends Brenden Pereira and Jahabar Sadiq are running The Malaysian Insider. And what about the millions of ringgit made by Fox Media? Your friend/proxy Pereira was behind it. Didn't Fox Media make millions from the Government from event management and PR for the five economic corridors. Fox Media was even receiving a RM250,000 monthly retainer from Sime Darby Berhad, the highest ever paid to a local PR company. That only stopped after the bloggers started to make a fuss about it. Is this money being used to finance the highly-paid CEOs and writers employed by The Malaysian Insider?

Having served under Kalimullah in the NST, I have a lot of stories about this man. But I will keep that for another day.

Thursday, July 15, 2010

Tahniah, Dato' Sabri!

Saya ingin mengucapkan setinggi-tinggi tahniah kepada bekas bos saya yang juga bekas Ketua Eksekutif Kumpulan Golden Hope Plantations Berhad Dato' Sabri Ahmad yang dilantik Pengarah Urusan Kumpulan Felda Holdings Berhad berkuatkuasa hari ini.

Beliau juga akan turut memegang jawatan Presiden dan Ketua Pegawai Eksekutif Felda Global Ventures Holdings Sdn Bhd.

Saya pernah berkhidmat dengan Dato' Sabri dari tahun 2004 hingga 2007 apabila saya memegang jawatan Pengurus Besar Hal Ehwal Korporat di Golden Hope Plantations. Pada masa yang sama, saya juga memegang jawatan Pegawai Khas kepada Dato' Sabri.

Saya memang kagum dengan kebolehan dan ilmu pengetahuan Dato' Sabri yang begitu luas. Banyak yang saya pelajari dari beliau. Beliau juga ialah seorang individu yang tekun, amanah, jujur, warak serta mempunyai hubungan yang begitu akrab dengan stafnya.

Dato' Sabri yang pernah menyandang jawatan Pengerusi Lembaga Minyak Sawit Malaysia (MPOB) dari tahun 2007 hingga April lalu, mempunyai pengalaman luas dalam industri perladangan.

Beliau telah berkhidmat dengan Golden Hope Plantations selama 20 tahun dan dilantik Ketua Eksekutif Kumpulannya pada tahun 2004 sehingga ianya digabungkan dengan Sime Darby Berhad pada tahun 2007.

Beliau juga adalah bekas pengerusi Persatuan Minyak Sawit Malaysia (MPOA).

Dato' Sabri mendapat pendidikan awal di Kolej Melayu Kuala Kangsar dan meneruskan pengajiannya ke peringkat Ijazah Sarjana Sains dalam bidang ekonomi pertanian di University of London.

Beliau juga mempunyai diploma lanjutan dalam kajian antarabangsa dari University of Rhode Island serta menghadiri program pengurusan lanjutan di Oxford University.

Dato' Sabri menggantikan Dato' Mohd Bakke Salleh, yang juga mula menjawat Presiden dan Ketua Eksekutif Kumpulan Sime Darby hari ini.

Saya pasti Felda akan mencapai kejayaan demi kejayaan dibawah kepimpinan beliau.

Wednesday, July 14, 2010


An announcement of the new Group Chief Executive Officer of Felda is expected tomorrow (Thursday, July 15).

The person, whom I cannot name just yet, is certainly most deserving. He has had an illustrious career in the palm oil industry and well respected by industry players.

The Government certainly made the right decision in appointing this person to helm Felda.

I have no doubt he will take Felda to greater, dizzier heights.

Thursday, June 10, 2010

Announcement on Monday?

The Sime Darby Berhad board is meeting on Monday, June 14. I heard that some kind of announcement is expected. I doubt it is going to be as dramatic as the Board members accepting responsibility for the RM2.03 billion losses and resigning en bloc, like most of us would like to hear.

Perhaps the announcement of the new President and Group Chief Executive?

Stay tuned to this blog. I may be able to give you a headstart.

Monday, June 7, 2010

Sime Darby board must be accountable, says Kadir

My former boss and prominent journalist cum blogger Datuk A. Kadir Jasin wrote an interesting piece in his blog Other Thots. I reproduce the full piece here:

MONDAY, JUNE 07, 2010
Isu Sime Darby: Hukum Seorang, Hukum Semua
A Kadir Jasin

[Komen menggunakan pengenalan anonymous TIDAK AKAN DILAYAN. Sila gunakan nama sebenar atau nama samaran. Jikalau menggunakan anonymous, sila nyatakan nama di penghujung komen. Ulasan yang mengandungi unsur fitnah, hasutan, perkauman dan bahasa kesat tidak akan disiarkan. Ulasan yang terkeluar daripada tajuk tidak akan diberi keutamaan.]

URA-URA Kelab Penyokong Kerajaan Barisan Nasional (BBCBN) hendak mendesak kerajaan agar tidak lagi melantik pesara sektor awam menganggotai lembaga pengarah syarikat-syarikat berkaitan kerajaan (GLC) ada baik dan buruknya.

Laporan media massa mengatakan cadangan itu diuar-uarkan (bukan war-war) berikutan kerugian besar yang dialami dua GLC iaitu Sime Darby Berhad dan Pos Malaysia Berhad.

Timbalan Pengerusi Kelab, Bung Moktar Radin, memberitahu portal berita The Malaysian Insider dia akan membangkitkan perkara itu dalam sidang Dewan Rakyat yang bermula hari ini.

“Kalau mereka tidak berminat (menerajui syarikat-syarikat besar) jangan paksa mereka memegang jawatan pengarah khususnya di syarikat-syarikat besar dan ternama macam Sime Darby,” kata Ahli Parlimen Kinabatangan, Sabah, itu.

Sebarang usaha untuk mendalami kefahaman mengenai kerugian atau prestasi buruk GLC, khasnya oleh Parlimen, adalah dialu-alukan. Malah ia satu kewajipan.

Namun adalah tidak adil dan tidak tepat menyalahkan ahli lembaga pengarah (ALP) yang terdiri daripada bekas pegawai kerajaan sahaja. Tindak-tanduk pengurusan pun wajib didalami juga.

Kita ambil contoh Sime Darby (SD). Ia sudah beberapa kali mengalami masalah yang menyebabkan kerugian berbilion ringgit. Mungkin ramai sudah lupa kemuflisan Sime Bank dan kerugian besar SD pada akhir tahun 1990an.

Sebenarnya kali ini SD tidak rugi. Malaj bagi separuh pertama tahun ini ia mencatatkan RM1.113 bilion keuntungan. Yang rugi lebih RM1 bilion itu adalah operasi minyak dan gas di Teluk Parsi dan pembinaan penjana elektrik hidro Bakun.

Kerugian operasi ini menjadi isu sensasi kerana SD baru sahaja menelan dua syarikat Permodalan Nasional Berhad (PNB) yang lain iaitu Golden Hope dan Guthrie Corporation.

Apabila penggabungan ini diilhamkan ketika pentadbiran Abdullah Ahmad Badawi dan didalangi oleh CIMB Bank atas nama Synergy Drive Sdn Bhd. pada tahun 2007, ramai yang menantangnya, termasuk PNB walaupun secara diam-diam.

Sebelum penggabungan, ketiga-tiga syarikat perladangan PNB itu beroperasi dengan menguntungkan walaupun ramai ALPnya terdiri daripada pesara awam, termasuk Pengerusi PNB, Ahmad Sarji Abdul Hamid.

Tetapi apabila SD siap digabungkan dan diuar-uarkan sebagai syarikat perladangan kepada sawit terbesar di dunia, bekas Timbalan Perdana Menteri, Musa Hitam, dilantik pengerusi dengan Ahmad Sarji sebagai timbalan.

Bukan Musa sahaja yang menjadi pengerusi atau ALP GLC. Ramai lagi ahli politik, sama ada yang bersara atau masih cergas, menjadi pengerusi dan ALP GLC. Jadi jangan salahkan ALP yang terdiri daripada pesara awam sahaja.

Malah ada ALP yang terdiri daripada orang politik sangat teruk. Ada ketua dan timbalan ketua bahagian yang tak tahu apa-apa pun (clueless) mengenai perniagaan dilantik untuk dapat elaun. Jadi Bung Mokthar wajib juga bahaskan peranan ALP yang terdiri daripada orang politik.

Khusus mengenai SD, saya lebih cenderung menganggapnya sebagai syarikat amanah Bumiputera dan bukan GLC. GLC milik semua rakyat Malaysia tetapi agensi amanah seperti PNB adalah milik Bumiputera.

Saya kata begitu kerana majoriti saham SD dipegang oleh Skim Amanah Saham Bumiputera dan PNB. PNB adalah agensi amanah Bumiputera.

Mengenai pelantikan menjadi APP ini, kita kena juga tanya, siapa yang lantik mereka kalau bukan kerajaan sendiri? Akibatnya, jadilah mereka pengarah bebas yang tidak bebas.

Pada satu masa dulu, SD mempunyai apa yang dipanggil International Board of Directors atau Lembaga Pengarah Antarabangsa yang terdiri daripada orang kenamaan Asia dan dunia.

Saya pernah beberapa kali dijemput oleh Pengerusi SD waktu itu, Allahyarham Tun Dr Ismail Mohd Ali, untuk makan tengah hari bersama mereka. Salah seorang yang saya masih ingat adalah Sir David Li Kwok-po yang kini berupa pengerusi dan ketua eksekutif Bank of East Asia, Hong Kong.

Jadi, dalam hal SD ini adalah tidak patut menyalahkan dan menghukum seorang sahaja iaitu ketua pegawai eksekutif, Ahmad Zubir Murshid.

Keseluruhan ALP dan pengurusan kanan yang membantu Ahmad Zubir wajib dipertanggungjawabkan. Begitu juga juruaudit luar jika mereka gagal membuat catatan (qualification) dalam audit tahunan mereka.
Posted by A KADIR JASIN at 8:11 AM 27 comments

Friday, June 4, 2010

Tun M: Sime Darby Board must be held responsible for losses

The Board of Directors of Sime Darby Berhad must take responsibility for the RM2.03 billion ringgit losses inccured by the group.

Former Prime Minister Tun Dr Mahathir Mohamad said the Board had fiduciary duties to shareholders and therefore, could not claim ignorance to the events that led to the massive losses.

Such an excuse, he said, did not make sense, as he himself was aware of Sime Darby's losses from as early as 2007.

Dr Mahathir said while the Group Chief Executive was responsible for the losses, the Board of Directors should also be held liable.

“If it had happened in another country, the Board would have resigned by now”, he said.

Dr Mahathir said this in an interview with TV3 this morning.

Tuesday, June 1, 2010

Subsidy cuts - shouldn't the corporate sector sacrifice too?

Subsidy cuts are inevitable. Let's accept that. Eventually they have to go. The Government cannot go on subsidising everything under the sun. It's going to impact the country's economy, although I doubt that it's going to be as dramatic as Minister in the Prime Minister's Department and the CEO of the Performance Management and Delivery Unit(Pemandu), Datuk Idris Jala put it.

I don't think any Malaysian in his or her right mind wants to continue to see Singaporeans travelling to Johor Baru to fill subsidised petrol or to shop simply because it's cheaper. Similarly, we don't want to see the Thais or Malaysians up north smuggling petrol and subsidised goods into Thailand to make quick profits. Every Malaysian would agree that this should stop.

It is a sin to allow foreigners to benefit from this at the expense of the country's economic well-being.

It is a fact that the Government of today led by Datuk Seri Mohd Najib Tun Razak is saddled by the deficit accumulated over the years. It's important that the deficit which now stands at almost RM300 billion is reduced or better, cleared, so that our vision to become an industrialised and a high income nation by 2020 can be realised.

However, my concern is the poor. The Government has to device a strategy to ensure that the hardcore poor and the vulnerable group do not end up poorer. While we vigorously pursue the developed nation status, we should not allow the disparity between the rich and the poor to widen. Poverty does not sustain stability and hunger does not sustain democracy.

The Government must be seen to act. The poor must be protected at all costs. One way is to introduce minimum wage. We have been arguing about this for a long time, but we are not getting anywhere.

By paying low wages, the rich employers are in fact, being subsidised. There are a few plantation companies in Malaysia which choose not to become members of the Malaysian Agricultural Producers Association(MAPA) so that they do not have to subscribe to the National Union of Plantation Workers (NUPW) basic monthly salary requirement. This is an outright exploitation of workers.

There are also discrepancies in other areas. One which quickly comes to mind is the energy sector. If the Government is considering a tariff hike, then Tenaga Nasional Berhad must re-negotiate its contracts with the Independent Power Producers (IPPs). Currently, power produced by the IPPs are being forced down TNB's throat, although it doesn't really need it.

TNB's current reserve power margin stands at 44.7 per cent. It may require about 20 per cent reserve for emergencies, but the remaining 25 per cent is left idle. This is absolute waste of money.

Granted that there is a contract between TNB and the IPPs requiring the former to buy the power produced by the latter, irrespective of the need. But all contracts can be re-negotiated. Even at the absence of a clause in the contract which allows re-negotiation, there is a provision in the Law of Contract which allows it.

I am sure, after many years, the IPPs have recouped their investments and have even made a lot of profit. As such, during crunch time, the IPPs should demonstrate good corporate citizenry by agreeing to re-negotiate their contracts. This is national service, so to speak.

For the country's sake, the IPPs should be flexible. If the country's financial position takes a dip, they too will suffer.

How do we explain to the rakyat that TNB is making the rich IPPs even richer by buying power that it does not need? How do we explain to the rakyat that they have to pay higher electricity tariff while at the same time, TNB has reserve power going to waste. Does it make economic sense?

If the Government is asking the rakyat to tighten their belts, it should do the same with the corporate sector.

My argument also extends to the highway toll concessionaires, while they make billions of ringgit, they insist on raising the toll each time the rates are up for revision. They insist on doing so even during a crisis.

During difficult times, all including the corporate sector, must sacrifice. The rakyat alone should not bear the burden. WE are after all the nation.

Sunday, May 30, 2010

The Sime Darby fiasco - the biggest scandal in Malaysia's corporate history

I have a gut feeling that Sime Darby Berhad, the world's biggest oil palm plantation company, is going to make history soon - for all the wrong reasons.

With an overzealous management, with some executives corrupt to the core and a Board of Directors which knew nothing about the things happening around it, the fiasco in Sime Darby is poised to become the biggest corporate scandal in Malaysia's history.

Therefore, those probing the financial scandal should not confine their investigations to the cost-overruns in Qatar and Bakun. There's more to it than meets the eye.

There are many other questionable deals which took place prior and after Sime Darby's merger with Golden Hope Plantations Berhad and Kumpulan Guthrie Berhad in November 2007.

I have some questions begging for answers:

1. What happened to the trading loss in China which had reached RM80 million at one stage? The Chinese buyers had refused to accept palm oil which was ordered when the price was high but fell when the shipment reached China? Why is palm oil being sold cheaper in China than it is in Malaysia? What is the actual quantum of investments of Sime Darby in China? Utilities Divison's Weifang operations, Jinning Port, Motor operations, property investments, etc. Has Sime Darby evaluated the country risks? Did Sime Darby over-expose itself in China? Was there a risk management report on China before all these investments took place? Were money paid to middlemen to secure projects?

2. What happened to the two AHTS (Anchor Handling Tugs) and one DLB (Derrick Lay Barge) which Sime Darby awarded to MLC Shipbuilding Sdn Bhd to build. Were these ships, worth RM155 million, ever delivered. Or was the RM155 million written off? Did Sime Darby call for tender before awarding the project to MLC? Does MLC, owned by one Redzuan Goh, have the expertise to build ships?

3. Why invest in plantations in Liberia? Is it worth taking the risk going to Liberia? Could Sime Darby have generated more money expanding/developing estates in Malaysia (ie Sabah/Sarawak) - less risk and still plenty of fertile land? Isn't it easier to deal with Sabah/Sarawak Government than the Liberian Government? What's the economic rationale of going to Liberia? This is despite the known fact that Guthrie started the Liberian project but got out of it twice due to civil wars. The Liberian Government is fragile. What if a new regime takes over and nationalises the Sime Darby project?

4. What is this special relationship with Brunsfield Group that enables it to secure many projects from Sime Darby. Among others, Brunsfield was given the contract to renovate KLGCC, to build Sime Darby's World Headquarters in Bukit Kiara, and The Oasis in Ara Damansara where the Divisional headquarters will be located. The total contract awarded to Brunsfield could actually be billions.

5. The sale of the land at USJ Elite Exit (now being developed by a private company - MCT). At what price was this land sold and what was its price when Sime Darby bought it? What is the market price now? Why was the land sold anyway? Is it to show income in an attempt to make losses elsewhere look smaller?

6. The Kuala Lumpur Golf and Country Club in Bukit Kiara now sits on a land leased from City Hall. Apparently, the Sime Darby management had agreed to buy the land from City Hall without the approval of the Board. To rectify the situation, a paper was submitted to the Board last week to approve the sales and purchase of the land in retrospect. It will be silly for the Board to do so, especially now when the Malaysian Anti-Corruption Commission is carrying out an investigation on Sime Darby. How much is the new facelift of the KLGCC going to cost?

I wonder if the Board is aware of all these things I have mentioned.

Friday, May 28, 2010

Sime Darby's losses reach RM1.3 billion

The provisions for losses incurred by Sime Darby Berhad's Energy and Utilities Division have now been raised to RM1.3 billion.

Announcing the company's third quarter results for Financial Year 2009/2010, its acting Group Chief Executive Datuk Azhar Abdul Hamid said the figure was not a final one.

The excerpts of the Press Statement issued yesterday:

The Energy & Utilities division had reported an operating loss of RM1,019 million in the first nine months of the year. This was after recording provisions for the oil & gas and engineering sub-segment in 3QFY2010 amounting to RM964 million that was announced on 13 May 2010.

The breakdown in the provisions totaling RM964 million is as follows:

RM200 million for the Qatar Petroleum (QP) project;
RM159 million for the Maersk Oil Qatar (MOQ) project;
RM155 million for the Marine project;
RM450 million for the Bakun project;

Inclusive of the above provisions, the total provision for the four projects at the end of the third quarter amounted to RM1.3 billion. These provisions are based on the current best judgment of the forecast cost to completion of each of the projects. The QP project was completed and handed over in August 2009. The MOQ project is expected to be completed by the end of the year. Negotiations on cost recovery in all four projects are ongoing.

NEXT: What really happened to Sime Darby's investments in China

Wednesday, May 26, 2010

MACC probes Sime Darby

I am glad that the Malaysian Anti-Corruption Commission has started its probe on Sime Darby Berhad as reported in the New Straits Times today:

I hope they read my two previous postings on Sime Darby while doing so. Here is the full story in the NST:

MACC steps in
Probe under way into Sime Darby’s huge losses
By Farrah Naz Karim
PUTRAJAYA: The Malaysian Anti-Corruption Commission (MACC) has taken a proactive step by initiating investigations into the massive losses suffered by Sime Darby.
Investigations will start with a probe focusing on the internal inquiry being carried out by the conglomerate. The company’s internal investigation, believed to have started some eight months ago, is to determine the real extent of the
losses in its energy and utilities division and whether they were anything beyond just making bad investment calls.

There may also be probes into other divisions and projects. MACC investigations director Mustafar Ali confirmed that the commission had started investigations.

“We will be identifying areas that have elements of corruption,

misappropriation and abuse of power.

“Like all cases, we’ll deal with this one with urgency, not only because this probably involves billions of ringgit but also the interests of the people,” he told the New Straits Times yesterday.

MACC had last week offered Sime Darby its expertise in detecting elements of graft but the country’s oldest and largest conglomerate had to date not approached the antigraft body for help in facilitating its investigation.

Until last week, MACC said it would let Sime Darby complete its investigation and would only open an investigation file into the financial affairs of the governmentlinked company if any element of corruption was suspected in its
massive losses.

Sime Darby recently confirmed the market’s worst fears when it announced that it would have to post massive losses suffered in projects in the Middle East as well as the Bakun hydroelectric dam project in Sarawak.

It is expected to post close to RM1 billion losses in its third quarter results,
which are expected to be released tomorrow. Sime Darby is also expected to disclose tomorrow the findings of the task force set up to investigate its
energy and utilities operations.

The cost overrunswere discovered by a board work-group formed in October last year to “assess the corporate governance and performance” of Sime Darby’s energy and utilities division. The work-group members are Datuk Seri Andrew Sheng, a member of the National Economic Advisory Council, Tan Sri Wan Mohd Zahid Mohd Noordin and Datin Paduka Zaitoon Othman.

In announcing the losses, Sime Darby also ordered its group chief executive, Datuk Seri Ahmad Zubir Murshid, to take leave of absence. The company has appointed Datuk Azhar Abdul Hamid acting group CEO for the interim period, while the government has assured transparency in any investigation into the company.

This is not the first time the anti-graft body started an investigation
into a GLC. In 1996, MACC, which was then known as Anti-Corruption Agency,
launched investigations into Perwaja Steel after it was declared insolvent,
with debts and losses totalling RM10 billion.

This led to the arrest of its managing director, the late Tan Sri Eric Chia, in February the same year, where he was charged with embezzlement. He was acquitted in 2007 after the Sessions Court ruled that the prosecution had failed to establish a prima facie case against him.

Tuesday, May 25, 2010

V. Sivapathasundaram (1942-2010)

For lack of a better word V.Sivapathasundram, a former teacher at Tunku Besar Secondary School (TBS), Tampin and hockey coach who passed away on Sunday at the age of 68, is simply a LEGEND.

Being as mischievous as I was growing up, I was often the subject of punishment by this man. Those were the days when teachers had special permission from parents, including mine, to use the rod, even outside the school.

There have been many ocassions when I was slapped so hard that I literally saw stars. I was then in my teenage years and played hockey for the school, Tampin district and the State of Negri Sembilan. Siva was my teacher-cum coach.

One particular incident which I shall never forget took place when I was in Form Five. It was a hockey-training day and I was given the duty of picking up hockey balls. When my team mate Amarjit and I got to the PE store, there wasn't a single ball. We later realised that the girls' team beat us to it.

So looking all over the PE store for hockey balls, I remarked:

"There are no hockey balls here, so I guess we'll have to use Siva's BALLS,". Both of us burst out laughing, and that's when we heard his signature cough. As we turned around, we saw Siva standing right behind us. I shall leave the rest of this story to your imagination.

Siva was a dedicated teacher with hockey being his No 1 passion. Like my friend and former colleague Jugjet Singh described in his column in the New Straits Times today, Siva was often pre-occupied plotting the defeat of the other hockey Titan in Negeri Sembilan - the St Paul's Institution. TBS would often meet SPI in the finals. Both had a fair share of winning.

Despite being a strict disciplinarian demanding both academic and sporting excellence from his students, Siva had a soft spot which he chose not to show. He gladly let some of his students to stay in his house for as long as they wanted. These students were poor and could not commute to school from home for hockey training because they lived far away and the hostel could not accommodate them.

A former TBS hockey player, Azlan Harun, recalled his experience staying with Siva. He bought special crockery for the Muslims and catered halal food for them, all at his own expense.

How many teachers we know today would do the same? How many teachers we know today would walk around the school field in the scorching afternoon heat to pluck thorns and line the hockey pitch? How many teachers in the rural areas we know today would take the trouble to go to KL and buy hockey sticks and boots for their students? Siva used to give them away for free to poor students. I was among the beneficiaries.

It will take a whole book for me to describe Siva's contributions to the development of sports in Tampin District, Negeri Sembilan and country. A voice in Sports did a fantastic job, here.

Siva's love for cigarettes landed him in hospital many times. He suffered at least a couple of heart attacks when I was still in Tampin. Two or three days after being discharged from the hospital, he would be back in the field. His deteriorating health never seemed to bother him.

I was told that three weeks before his death, he was still coaching young children under the BAKAT programme. He was coughing away, but that didn't stop him.

Siva was the man behind the scene. If there is a posthumous award for a dedicated teacher and sportsman, I would vote for him over and over again.

Thank you and goodbye, Sir. I am forever indebted to you. And you shall forever remain my favourite teacher, my mentor and my friend.

May you find eternal peace.

Sunday, May 23, 2010

The Sime Darby Fiasco - who else should be held responsible.

In my last posting, I promised to name the senior management executives who should be held accountable for the losses incurred by Sime Darby Berhad.

My argument that the management had contravened the Company's Act and failed to comply to the principles of Corporate Governance is supported by Sime Darby Chairman Tun Musa Hitam in an interview which appeared in Mingguan Malaysia today.

This is what he said, and I quote:

"Semua laporan yang sepatutnya (sampai), tidak sampai kepada pihak Lembaga Pengarah. Kalau ada pun, ia tidak memberi gambaran sebenar. Kami tidak mempunyai laluan untuk maklumat sebenar."

In other words, Tun Musa is admitting that the management had misled the Board of Directors. Besides the President and Group Chief Executive of Sime Darby Datuk Ahmad Zubir Murshid, why were the rest of the management executives in the same chain of command spared? To me, this is mind-boggling.

Let me try and put in perspective what had happened earlier when Golden Hope Plantations Berhad incurred trading losses amounting to RM40 million due to overzealous trading activities by a rogue trader. The matter came to light between 2006 and 2007 and was accounted for in several financial statements. In other words, Golden Hope made it transparent.

Unfortunately due to the high palm oil prices, the amount was inflated to about RM60 million.

But when Golden Hope and Kumpulan Guthrie Berhad were merged with Sime Darby in 2007,the Sime Darby management led by Datuk Seri Ahmad Zubir Mushid insisted on the resignations of the former Group Chief Executive of Golden Hope Datuk Sabri Ahmad (who was absorbed into Sime Darby as Advisor, Plantations Division), the director of Oils and Fats Dr Anhar Suki, the Director of Finance Razidan Ghazalli (who was absorbed into Sime Darby as Group Chief Financial Officer), the General Manager of Trading Azmir Yahya and the General Manager of Golden Jomalina Sdn Bhd Muhammad Mohan Abdullah.

Datuk Sabri, Dr Anhar and Azmir chose to resign, but Razidan and Muhammad Mohan stood their ground and refused to do so. As a result, both Razidan and Muhammad Mohan were sacked on the same day. The two then took their case to the Labour Court. Months later, in an apparent admission of guilt, Sime Darby chose to settle the matter out of court and compensated both of them.

The fact is, Golden Hope did not keep the matter under wraps. The loss was reported in all its financial statements, and yet Datuk Sabri, Dr Anhar and Azmir were forced to resign while Razidan and Muhammad Mohan were given the sack. The decision to take action against the five was a Board decision headed by Tun Musa. He has to be consistent, but from what I have observed so far, he is not so.

In contrast to what Golden Hope did, the Sime Darby management tried to hide the losses incurred in Qatar and Bakun. Only one provision was made in the second quarter results of the 2009/2010 Financial Year - to a tune of RM210 million for cost over-runs in the Qatar Maersk Oil project. In actual fact, the amount was much higher.

It also made no mention of the losses incurred in the Bulhanine and Maydan Mahzam project with Qatar Petroleum as well as the cost over-run in the Bakun project.

In other words, not only did Sime Darby go against the principles of good governance but also breached the various laws.

So who among the management should be held responsible:

1. Sekhar Krishnan - The Group Financial Officer when Sime Darby ventured into Qatar and when the whole fiasco began.

2. Hisham Hamdan - The former Head of Group Stategy and Business - he vets through all investments. If he says no go, papers do not go to Board. All projects, including the Qatar projects and Bakun were okayed by him. He did not see the fact that Sime Darby was not ready for the projects in Qatar. It is strange that he is now tasked to lead Energy and Utilities Division.

3. Madam Tong Poh Keow who was appointed the Group Chief Financial Officer of Sime Darby Berhad on June 24, 2008 - She was Group CFO for year end June 2008 and June 2009 accounts - why did she failed to insist on provisions? Why did she sign the Statutory Declaration in the annual report saying that the accounts were correct?
In an Annual Report, the directors sign the Statement of Directors (s169(15)Companies Act). The CFO signs Statutory Declaration (s169(16) Companies Act) in accordance with Statutory Declaration Act 1960. So what is the CFO's legal position in making incorrect statutory declarations? In an Annual Report, the key sections are:
1) Corporate Governance Statement
2) Chairman's Statement - Nothing was mentioned in Tun Musa's statement in June 2008 and June 2009 in relation to E&U Division
3) Audit Committee Report
4) Statement of Internal Control - contains Board responsibility, risk management framework, etc
5) Directors' Report

Were the representations in the above sections accurate or misleading?

Since Annual Reports are tabled at the Annual General Meeting for shareholders, the Sime Darby shareholders, public at large, the Securities Commission, Bursa Malaysia, Minority Shareholders' Watchdog Group, etc were obviously misled. This is an obvious breach of the Companies Act.

4. Nik Muhammad Hanafi Nik Abdullah who was then Sime Darby's Head of Internal Audit. He failed to question the Finance and Accounts Department when it did not make provisions for the losses.

5. Abdul Rahim Ismail, who was then the Chief Financial Officer of the Energy and Utilities Division. He should have known all along the extent of the damage.

Sime Darby must act against those responsible, even if it means instituting legal action. Transferring them to another division like what it did in the case of Nik Muhammad Hanafi and Abdul Rahim, would not solve the problem. The problem will be merely shifted to another division.

Saturday, May 22, 2010

The entire Sime Darby Board must go

The only way to rescue Sime Darby Berhad now is to sack the entire Board, including chairman Tun Musa Hitam and to revamp its top management. To my mind, none of the divisional heads should remain. This is because they were all part of the decision-making process. They are collectively responsible for all the wrong-decisions, unlawful decisions, non-compliance of Corporate Governance, etc.

The Board of Directors of the expanded Sime Darby was appointed just before the Legal Day One of the merged entity on November 27, 2007. (Sime Darby, Golden Hope Plantations Berhad and Kumpulan Guthrie Berhad were merged). In another six months, that would be three years.

Therefore, the Board cannot claim ignorance to what Sime Darby has been doing. Legally, having no knowledge is no defence. Sime Darby's investment in Qatar dates back to 2006 and 2007. It only goes to show that the Board failed to keep in check the actions of the management or worst, was by-passed altogether. But one thing for certain, the Board had failed miserably in monitoring the projects entered into by the management.

The proposal to merge Sime Darby, Golden Hope and Guthrie was mooted by Sime Darby, then led by Datuk Seri Ahmad Zubir Murshid. At the point of the merger, all three companies were very profitable. In it's final year, Golden Hope made RM700 million and had embarked on a mission to increase its profits to RM1 billion by this year. That's half the profit the expanded Sime Darby is making now.

The exercise was called a merger because it was a Related Party Transaction. In actual fact, it was a Sime Darby take over. They did not call it a take over, because they would then be required to adhere to the stringent Take Over Code. If it was a take over, Permodalan Nasional Berhad as a major shareholder would not be able to exercise its voting right as it was a RPT.

I was then the General Manager of Group Corporate Affairs cum special Officer to the Group Chief Executive at Golden Hope. Therefore, I was privy to certain information.

I have every reason to believe that Tan Sri Ahmad Sarji Hamid (now Tun) who was then the Chairman of both Sime Darby and Golden Hope, was by-passed when the merger proposal was made to the Government. He was kept in the dark until the very last minute. I may be wrong here, but when confronted by the senior management of Golden Hope Tun Ahmad Sarji denied knowledge of the merger. His facial expression was genuine. It's either that or Tun Ahmad Sarji is a damn good poker player.

Datuk Seri Zubir did not want Golden Hope to know about the merger until after Tun Abdullah Ahmad Badawi, the then Prime Minister approved it. My point is this, if Datuk Seri Zubir could do things without the knowledge of his Chairman and his Board then, could he not do the same now.

The reason for keeping the planned merger a secret was simple. Datuk Seri Zubir knew that Golden Hope and Guthrie would not agree to it. To keep them in the loop would only give rise to messy debate. So the best thing is not to consult them at all. Get the Government to agree to it and then shove it down their throats.

In fact, to this day, most of the ex-Golden Hopers and Guthriens who joined Sime Darby wish the clock can be turned back. The merger was a big mistake. It failed from the very beginning, a non-starter so to speak. It is working against the country and the Government. The number of resignations at the Plantation Division is climbing by the day. Morale among the staff is a big issue.

A few days ago after announcing that Datuk Seri Zubir had been asked to go on leave pending the expiry of his contract in November, Tun Musa treated editors and bloggers to a sumptuous dinner and tried to explain his side of the story. Perhaps also to get them over to his side.

But things don't work that way.

So many things need explanation. They include:

1. Payment made to middlemen in dealing with the Chinese Government/projects in China
2. The projects awarded to the Brunsfield Group of Companies with/without the approval of the Board
3. Encroachment into the High Value Virgin Forest in Kalimantan which incurred the wrath of the Indonesian authorities. What was the total amount of money paid as compensation?
4. The RM18 million paid to one "Azeez". Read this.
5. The lavish lifestyle of certain people, globetrotting with private jet, etc...
6. The sale of the land at USJ Elite Exit (now being developed by a private company - MCT). At what price was this land sold and what was its price when Sime Darby bought it. What is the market price now? Why was the land sold anyway? Is it to show income in an attempt to make losses elsewhere look small?
7. The false statement made in relation to the projects in Qatar in 2008 in response to the posting by "Sime Darby Watch". Sime Darby issued a statement denying the cost over-run. It is now evident that the statement was issued to mislead the authorities including the Securities Commission and Bursa Malaysia as well as the shareholders and the general public.

As an Amanah Saham Nasional account holder, I call upon the Government to set up an independent committee to re-audit the company accounts over the last five years.

I am not at all convinced that the negative impact on Sime Darby's balance sheet this year can be capped at RM964 million. Someone try and convince me please.

And I do hope PNB would not use the Sime Darby loss as an excuse to pay lesser ASN/ASB dividends this year.

As things fall into place, I am now beginning to wonder whether the merger was deliberately planned to "hide" some of Sime Darby's earlier indiscretion/wrongdoings. If the merger did not take place, the losses in Qatar and Bakun, would have impacted Sime Darby in a far greater way. Perhaps, someone saw the merger as the only solution to cushion the impact. According to The Star, Sime Darby's market capitalisation was about RM71 billion in January 2008, two months after the merger. Its Market Capitalisation is now RM52 billion and dwindling.

What Sime Darby is left with now is the cash and assets it took from Golden Hope and Guthrie.

Next posting: The four senior executives who willl have to face the music...

Saturday, May 15, 2010

Wee Choo Keong now an Independent

I congratulate my long-time friend and MP for Wangsa Maju saudara Wee Choo Keong for taking the bold decision to quit Parti Keadilan Rakyat.

Although our views on national politics defer most of the time, Choo Keong and I have been friends for about 20 years now. When I first met him as a cadet reporter with the New Straits Times, he was still a DAP member.

Choo Keong is a non-nonsense, man of principles.

He left DAP when the party deviated from its founding tenets and when the "Lim" family started to practise nepotism. Choo Keong then set up the Malaysian Democratic Party in 1998. He later decided run in the 2008 general election under PKR.

Choo Keong's departure from PKR is a loss the party can never recover.

Good move, saudara Choo Keong.

Friday, May 14, 2010

Re-audit Sime Darby accounts

As an Amanah Bumiputera Berhad account holder, I call upon the Board of Directors of Sime Darby Berhad and the Government to set up an independent audit committee to re-audit the company's accounts over the past five years.

The committee should in particular investigate losses in the energy and utilities, property and the motors divisions.

I am puzzled as to why Sime Darby awarded many big property development projects to Brunsfield Berhad despite the fact that Guthrie, which has expertise in property development, is now part of the enlarged Sime Darby.

The committee should also investigate the disposal of high-value land. I wonder if all these decisions were made with the approval of the Board.

If there are elements of fraud, those responsible must be sent to prison.

Thursday, May 13, 2010

Zubir out, Azhar fills in...temporarily.

Held responsible for the losses in its projects in Qatar and Bakun, The President and Group Chief Executive Officer of Sime Darby Berhad Datuk Seri Ahmad Zubir Murshid has been ordered by the Board of Directors to take leave of absence pending the expiry of his contract on Nov 26.

Datuk Azhar Abdul Hamid, currently the Executive Vice-President, Plantations has been appointed acting Group Chief Executive until a candidate is found to fill the vacancy.

Following is the full statement from Sime Darby:

For Immediate Release
Thursday, 13 May 2010

Sime Darby Addressing Challenges In Its Energy & Utilities Division

KUALA LUMPUR, 13 May 2010 - The Board of Directors of Sime Darby Berhad would like to state that in October 2009 it established a Board Work Group to review the operations of its Energy & Utilities Division (the "Division"). The purpose of the Work Group was to assess the corporate governance and performance of the Division, following its results in FY2009.

The Work Group consists of Datuk Seri Panglima Andrew Sheng Len Tao (Chairman), Tan Sri Wan Mohd Zahid Mohd Noordin and Datin Paduka Zaitoon Dato' Othman. The Work Group has been advised by independent lawyers and accountants.

The Work Group reviewed in particular: the Bulhanine and Maydan Mahzam project with Qatar Petroleum (the "QP Project"); the Maersk Oil Qatar project (the "MOQ Project"); a project concerning the construction of vessels for use in the MOQ Project (the "Marine Project"); and the Bakun hydroelectric dam project. The Board deliberated on the findings of the Work Group on 12 May 2010.

The key findings of the Board were:

1. The QP Project was awarded in April 2006 and was scheduled for completion in August 2008. However, the Division has encountered delays and cost overruns which resulted in losses on the project exceeding RM500 million, which have already been accounted for. The Division is currently in negotiations with the client on the QP Project on claims for the cost overrun. Although negotiations are ongoing, in light of the delay in concluding this matter, the Board has decided to reverse the revenue of RM200 million previously recognized in the Group accounts for FY2009.

2. The MOQ Project was awarded in January 2007 and was due for completion in October 2009. There have been delays and cost overruns in this project which have resulted in foreseeable losses of RM526 million for FY2010. Of this, RM367 million has already been recognized in the Group's first half FY2010 results and the Board has decided to recognize the remaining RM159 million. Again, negotiations are currently underway with the client on the MOQ Project.

3. The Marine Project concerns the construction of two tug boats and a Derrick Lay barge for use in the MOQ project. The barge has not yet been delivered and the Board estimates that the project may result in losses of about RM155 million. Management is presently reviewing all available options.

4. The Bakun hydroelectric dam project, in which Sime Engineering Sdn Bhd holds a 35.7% effective interest, was awarded in September 2002 and was initially scheduled for completion in September 2007. However, due to various factors, completion has been delayed and costs have escalated. Management estimates that there could be a potential additional cost attributable to the Group in the FY2010 results of RM450 million. Again, negotiations are in progress with the client and subcontractors on the project. The Group is appointing independent technical advisers on the project.

After negotiations are concluded with the client in each project, further announcements will be made.

As a result of the above, the Group estimates there will be a negative impact of RM964 million on its results for the second half of FY2010. The Group announced a profit of RM1,113 million for the first half of FY2010. The third quarter results of the Group will be announced on 27 May 2010.

The Board has seriously considered the implications of the above with regard to the management and internal controls of the Group and is taking immediate and stringent measures to correct the deficiencies identified.

The President & Group Chief Executive (GCE), Dato' Seri Ahmad Zubir Murshid, has been asked to take leave of absence prior to the expiry of his contract on 26 November 2010. Pending the appointment of a new President & Group Chief Executive, Dato' Azhar Abdul Hamid, currently Executive Vice President - Plantation Division has been appointed Acting GCE. He will work closely with the Group Chief Operating Officer, Dato' Abd Wahab Maskan who will be responsible for Group operations and also with the Group Chief Financial Officer, Madam Tong Poh Keow. Mr Franki Anthony Dass, currently Head, Plantation Upstream, has been appointed Acting Executive Vice President - Plantation Division. Meanwhile, the Board's Nomination Committee has been tasked to search for a new GCE. In making these new appointments, the Board has given instructions to Management to strengthen controls and manage all operations in the most prudent and efficient manner.

As and when further information becomes available, Sime Darby will make the necessary announcements.

Thank you.

Important Announcement at Sime Darby?

Something's brewing at Sime Darby. Heard that there will be a Press conference at the Sime Darby Convention Centre in Bukit Kiara at 2.30pm today.

I wonder if heads will roll for the losses in Qatar and Bakun which exceeded RM2 billion.

When Golden Hope recorded a trading loss of RM40 million before the 2007 merger, the Group CEO Datuk Sabri Ahmad and several others were asked to resign by Sime Darby post-merger.

Two other Golden Hopers Muhammad Mohan Abdullah and Razidan Ghazalli were sacked. Several months later, however, the two were paid off handsomely by Sime Darby, perhaps in an admission of guilt. The two then withdrew their legal action against Sime Darby.

I think the Group CEO of Sime Darby Datuk Seri Ahmad Zubir Murshid and his entire management team should be held responsible for the losses in Qatar and Bakun.

What is RM40 million compared to RM2.76 billion?

Friday, May 7, 2010

CIMB downgrades Sime Darby

Sime Darby Bhd was downgraded at CIMB Investment Bank Bhd as media reports on the Malaysian company incurring cost overruns from building the Bakun hydro-electric project raised concerns it may hurt earnings.

The company was cut to “neutral” from “trading buy” and its share price estimate reduced to RM9.70 from RM10.82, CIMB said in a report today. -- Bloomberg

Sime Darby probes?

KUALA LUMPUR: Malaysia's Sime Darby said today it has set up a task force to investigate its energy and utilities division to address "the tough and challenging situation it is currently facing".

The Star newspaper had cited unnamed sources yesterday as saying Sime Darby has incurred more than RM1 billion in cost overruns for carrying out civil works on the Bakun dam.

"The group would like to confirm that a task force is investigating all aspects of this division's business operations," Sime Darby said in a statement posted on its website.

"The task force has yet to complete its investigations, and once completed, the group will make all relevant disclosures during its third quarterly results announcement on May, 27 2010."

"The Sime Darby management is aware of the difficulties and challenges besetting its energy and utilities division, especially with regard to operational efficiency and project management, and has instituted a new management team at the division."

It said it is addressing the situation by implementing appropriate measures.

- Reuters

Thursday, May 6, 2010

Cost over run at Sime Darby...again!

The Star report on May 6, 2010:

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.

Note: Al-Fatihah to my former Golden Hope colleague Azlin Ariffin who died a few days ago while carrying out her duties and also to the worker who suffered the same fate at Sime Darby's St Helier Estate a few days ago. Both were Class One deaths.

Tuesday, April 6, 2010

The passing of a journalism Guru...

Caption: K. Bala, the team manager of the NST Editorial hockey team holding the trophy after the team emerged champion in the NST Inter-Department hockey tournament. Three others in this picture - John Pillay, M.A. Razman (aka Rattan Singh) and C. Navaratnam - have since passed on.

I lost yet another journalism sifu today.

K. Bala, who used to send shivers down the spine of every journalist I know at NST and Malay Mail, died in his sleep in Pulau Langkawi last night. He has been spending a lot of time in this legendary island upon his retirement some 15 years ago. He grew so much fondness for this island that even in his ill-health, he visited the island on and off.

Bala was a taskmaster, but never stinged on passing on his knowledge to young reporters. I was among them. He scolded us everyday, made sure we got out of the office to meet contacts and made us sit next to him when he was clearing our stories. As much as he grumbled, he taught us.

He did not spare the rod and did not spare the harsh words. But when it was end of the year and bonus time, he was fair in the performance appraisal. Many of my colleagues can vouch for that.

There are many stories about Bala. If I decide to write a book in future, perhaps he will take up a whole chapter.

Saiful, Kams and I had made plans to visit Bala one of these days. That didn't take place because the three of us couldn't actually agree on a suitable time. We now have to live with the regret that we didn't.

Goodbye Bala. Thank you. The country's journalism fraternity mourns your passing. May you rest in peace.

Monday, April 5, 2010

More on Sime Darby's RM1 billion loss in Qatar

To those unfamiliar with the Sime Darby Berhad project in Qatar, here is some background. This is what The Edge wrote on March 8, 2010:

Big Money: Keeping an eye on Sime’s growing list of cost overruns

Tags: Sime Darby Bhd

Written by Jenny Ng
Monday, 08 March 2010 00:00

The saying that there is no smoke without fire rings true yet again. This time it relates to the year-old speculation of losses incurred at Sime Darby Bhd’s oil and gas (O&G) projects in Qatar.

Sime Darby provided for RM210 million in cost overruns on its RM2.1 billion Maersk Oil Qatar (MOQ) project during its second quarter ended Dec 31, 2009. Sime Darby’s O&G sub-segment recorded losses of RM201 million in 1HFY2010, which led to RM110 million losses for the energy and utilities division.

The MOQ project had been dogged by rumours of cost overruns and losses — from as little as RM120 million to as high as RM800 million — in 2008 and 2009, all of which were denied by Sime Darby.

Two weeks ago, this publication highlighted the possibility of a provision of over RM100 million on Sime Darby’s other Qatar project — the RM1 billion Qatar Petroleum project in the Bull Hanine and Maydan Mahzan fields.

It turned out that the provisions were for MOQ to the tune of RM210 million. Both projects were awarded to then-listed Sime Engineering Services Bhd in 2006 and 2007.

When contacted, Sime Darby says the cost overruns were incurred on transport and installation, and hookup and commissioning works. These costs have been booked in and the project is expected to be handed over soon, it adds.

It is not clear if the overruns were the result of under-budgeting, an unexpected increase in raw material costs, or both, or some other reason.

In FY2009, Sime Darby had provided for the Qatar Petroleum project which resulted in losses of RM80 million for the O&G sub-segment. The project was completed and handed over last year.

The MOQ project is now 96% completed. In an analyst briefing, Sime Darby gave the assurance that all cost overruns had been provided for, and confirmed this in its response to
The Edge.

“Yes, at this point Sime Darby does not foresee any further cost overruns for both the Qatar Petroleum project and the Maersk Oil Qatar project. As stated earlier, the Qatar Petroleum project has already been handed over and is fully provided for,” says the company.

Besides a change in leadership at its energy and utilities division, following the resignation of Datuk Mohamad Shukri Baharom who has been replaced by Hisham Hamdan, Sime Darby says it is also taking steps to prevent a repeat of the cost overruns. Hisham was previously the executive vice-president for group strategy and business development.

“We are in the midst of reviewing and reevaluating the systems and processes in the division. Naturally this will involve tightening controls and ensuring the highest standards of project management and monitoring. The review will take more time. In the meantime, we continue to position ourselves to bid for more contracts and projects, and we are confident that the division will become an integral part of the group’s overall growth strategy,” it says.

Be that as it may, why weren’t the controls and high standards already in place, especially after the Synergy Drive mega merger involving eight listed companies (including Sime Engineering), whose ultimate goal is to grow shareholder value?

Some may consider the amount of RM210 million to be immaterial to a company with a market capitalisation of more than RM50 billion and makes an annual profit of over RM2 billion. Besides, the energy and utilities division is among the smaller of Sime Darby’s five core businesses in terms of revenue and income. Still, it is good money which could have been put to better use. Incidents like cost overruns indicate incompetence and inefficiency, which only support the argument for Sime Darby to overhaul its diversified and sprawling operations, including the listing of its plantation unit and selling the auto business.

Given the energy and utilities’ smallish contribution to Sime Darby’s bottom line, investors may find it easier to forgive the losses (the RM210 million provision works out to 3.5 sen per share) as they are overshadowed by the group’s combined earnings. This argument supports the case for keeping Sime Darby’s various businesses intact.

If the Synergy Drive merger had not taken place, the impact would have been more visible — possibly on the share price of Sime Engineering, for instance. Then again, cost overruns are not totally alien to Sime Engineering. Since its listing in August 2003, it fell into the red in FY2004 and FY2005 due to provisions for cost overruns.

Sime Engineering was the lead partner with a 35.7% stake in the Malaysia-China Hydro Joint Venture, which was constructing the main civil works for the Bakun Hydroelectric Project. The contract was worth RM1.8 billion. In FY2004, Sime Engineering made a provision for RM77.1 million for foreseeable contract losses arising from changes in the cost structure of the project.
In FY2005, it made an additional provision of RM55 million on the same project as it experienced delays, bringing the total provisions on the project to RM130 million.

Although it has to be said that the recent provisions were for the O&G sub-segment and the earlier provisions were from the construction business, one can’t help but wonder whether Sime Engineering has learnt from past experience.

To be fair, cost overruns and delays are risks prevalent in engineering and construction works, and 10% cost overrun is sometimes considered the norm depending on the nature of the job and reasons for the cost increase. The good news is negotiations with the client could lead to write-backs. However, these may take time.

With a new guy helming Sime’s energy and utilities division, shareholders and investors will be keen to see if he can bring about positive changes to the O&G business and entire division as well. With a growing list of cost overruns, investors will certainly be watching closely.

You can read the article here.