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.


Anonymous said...

I think we shud re-employ all the ex-GHope/Guthrie Senior staff to replace them.


Anonymous said...

Most of X-Ghope and X-Guthrie strongly support the idea and we need to re-evaluate all strategic positions held by X-Sime whom we believe always good at preaching and talking but execution wise was absolutely very poor and had led to the losses! Cakap and Gaya bagus but poor at managing issues. Hancus! in totality with the fiasco all employees are now demotivated & not to mention about bonus hancus becoz of X-Sime wrong doing.


Energy Audit said...

I have heard about this report by my friend and I got a basic idea from this. The description given by all is very correct.

Anonymous said...

If RM120million loss,Sime make BIG headlines on the dismissal of innocent senior staff,BUT now the LOSSES are in the region of RM2BILLION..and not even a whimper in the media on who has to be TERMINATED(not resign or allowed to go on leave!)