Musang Hitam promises ‘thorough probe’ on Sime’s losses
May 20, 2010
Malaysiakini reports:
Musa Hitam promises ‘thorough probe’ on Sime’s losses
The Musang and the RI President SBY
Sime Darby Group chairperson Musa Hitam remained mum over crucial details of the investigations into the company’s cost overrun fiasco, reportedly amounting to about RM1 billion.
He also refused to entertain calls by parties demanding for his resignation, and also refused answer questions on whether he is prepared to resign. “Let the due process of the investigation run. If the conclusion shows that we are accountable, then we will take the responsibility,” he said.
The financial fiasco in the GLC – the biggest in the country – was revealed following the company board’s decision to ask Chief Executive Officer Ahmad Zubir Murshid to take a leave of absence.
He was blamed for the RM946 million in cost overruns from the Bakun hydroelectric project and three other energy and utilities project by the conglomerate under his leadership.
Calls for Musa’s resignation
Following this, there has been calls for Musa’s resignation as well. Musa promised that a thorough investigation would take place but was scant on details – such as the time frame and personalities to be investigated – but assured that it will be conducted by internal and external financial experts.
“We are not here to point fingers at anyone. We are just going to look at the short-term solutions, as well as the long-term solutions,” he said.
Dr M’s RM1.8 billion claim
He also refused to address the claims, publicised by former prime minister Dr Mahathir Mohamad in his blog, that the total cost overrun could balloon up to RM1.8 billion. “Let’s just stick to the figure in the statement,” he said, referring to the press release by the conglomerate on May 13.
He revealed that “restructuring of all levels” can be expected and that investigations will encompass all divisions in the conglomerate. “Give us an opportunity to look into the whole group,” he said.
Speaking at a Press conference after closing the sixth World Islamic Economic Forum in Kuala Lumpur Convention Centre on Thursday night, he said that he has always been espousing transparency even during his time as deputy prime minister, and that he has never committed anything in bad faith.
He also vehemently defended the integrity of the Board of Directors, saying that the members are of the highest credibility. “We have the courage to admit when necessary,” he said during the lengthy press conference.
PM wants probe
The scandal first hit the limelight when a business daily reported of cost overruns with the hydroelectric Bakun Dam earlier this month. However, Sime Darby said that the Board of Directors have been aware of the overruns when a board working group was formed in October last year to “assess the corporate governance and performance” of the conglomerate’s Sime Darby’s energy and utilities division.
The work group is chaired by Andrew Sheng Len Tao. Other group members include Wan Mohd Zahid Mohd Noordin and Zaitoon Othman. They also discovered losses in the Bulhanine and Maydan Mahzam project with Qatar Petroleum (the “QP Project”), the Maersk Oil Qatar project (the “MOQ Project”), and a project concerning the construction of vessels for use in the MOQ Project (the “Marine Project”).
The President and Group Chief Executive Officer Ahmad Zubir Murshid has also been asked to take leave of absence until his term expires on November 26, 2010.Prime Minister Najib Abdul Razak has asked for a probe of the losses but has refused to point fingers at the culprits.
Musa must make way to ensure a thorough investigation. While I have respect for Andrew Shang for his outstanding professional and academic credentials, I do not whether lawyer Zaitoon Othman who is on the Utilities and Oil and Gas Division’s supervisory board together with Tan Sri Tajuddin Ali should be a part of the work group which Andrew leads. I also wonder what Wan Mohd Zahid Mohd Noordin, a former Ministry of Education bureaucrat and a close buddy of Tun Ahmad Sarji, can contribute to the whole investigation process except to drink coffee and consume cakes.
The whole matter is now very politicised with Mahathir Mohamad joining the fray.Maybe this the way Mahathir can take a dig at the Black Fox (Musang Hitam). I am told by sources in Sime that their dislike for each other is intense and bitter.—Din Merican
dinobeano - May 20, 2010 at 11:56 pm
It is not much the RM1 billion cost overrun alone Din, its the fact that these numbers have been well kept from public eyes for 3-4 years that troubling.
Sentinel - May 21, 2010 at 12:24 am
“..investigation process except to drink coffee and consume cakes.”
Yep, and the coffee is atrocious and the kueh are laxatives! Tun Musang has gone through a difficult time and from the way he answered, I think he’s totally fed up. Unlike armchair critics like us, he can’t just get up and cabut.. lose facewater (maruah) ++. Dr Chan was rambling a bit, but he gave us some insight of the utter chaos in Sime Darby Group, which doesn’t surprise many.
Compared to that scrooge, the Wilmar Group, Sime Darby is like Father Christmas dispensing unwarranted cookies for its directors, while covering up it’s snafus. It’s little wonder why our blog host couldn’t thrive in a political parasite, like this entity. Not dastardly enuff!
I think besides Sime, all GLC’s ought to be investigated – they are corrupt, inefficient, incompetent and lack strategic direction. Noticed your electricity bill, yet?
_________
Menyalak-er,
Frank is missing. Perhaps, he too is fed up with the system. I am sure he will be back after he has rested. His grandkids are keeping him busy.
Sometimes Directors forget their fiduciary responsibility. Management too must be carefully monitored. No easy answers. The majority shareholders mainly PNB and institutions like EPF and trust funds will vote in favour of our Musang staying as Chairman. I have seen ordinary shareholders helpless at SDG AGMs and EGMs as they are usually outvoted. The only way these people can retaliate is to dump SD shares if they are unhappy with the company’s performance. –Din Merican
Menyalak-er - May 21, 2010 at 12:58 am
I agree with you Menyalak-er .
I think besides Sime, all GLC’s ought to be investigated – they are corrupt, inefficent, incompetent and lack direction. Gunung pun boleh lenyap dengan depa ni…
baharuddin - May 21, 2010 at 1:09 am
Here is what the Malaysian Insider reports:
By Yow Hong Chieh
May 20, 2010
Musa speaking to the press today, May 20, 2010.
Sime Darby chairman Tun Musa Hitam today refused to give a timeline for ongoing investigations into the troubled company as further speculation will affect its share price.
“There is [a timeline] but I’m not going to tell you… It affects the shares,” he said. “The market will go up and down.”
Following the announcement of Sime Darby President and Group Chief Datuk Seri Ahmad Zubir Murshid’s departure, Sime Darby shares took a tumble from RM8.65 last Tuesday to RM8.20 at the close of today’s trading.
Ahmad Zubir was asked by the Board to take leave of absence following the discovery of RM964 million in cost overruns from four energy and utilities projects, including the Bakun Dam project, racked up by the company during his tenure.
When pressed for a response to calls for his resignation along with the rest of the board, Musa reiterated that the only people who can decide that were the shareholders.
“The only people who can decide whether we should leave or not… are the shareholders,” he said.
He said the next Sime Darby AGM will be in November, adding that if it was “urgent”, it was possible to call for an EGM.
“There is a process. If somebody wants to have… [a poll] by show of hands, there is provision for that [in the company’s act].”
He had earlier told The Malaysian Insider that he was prepared to take responsibility for the fiasco and step down if necessary. However, Musa stressed once again that the probe was still a “work in progress”, and that there has never been such a serious and extended exercise in Sime Darby’s history.
“Long term is long term. We should look at what we want to do [in the long term] in detail. “Some of us are accountable, maybe. But again, it is up to this process. We want to do restructuring in the long term, restructuring [at] all levels.”
He explained that this restructuring was necessary to ensure that Sime Darby continues operations.
“We are interested to see that Sime Darby lives forever. And my life’s not going to be very long, you know? I want to see that I’m not going to destroy it.”
dinobeano - May 21, 2010 at 1:20 am
Mr Merican
You are indeed right about Mahathir- Musa hatred towards each other as very intense and bitter.
His dislike of Badawi is not that deep. More a target against KJ whom he detest for going against him when he was a student leader in England. Also he sees kJ as a challenge against Mukhriz.
Musang was ‘rehabilitated’ by Badawi, his close political ally. Remember Umno team B.
He is high profile now with several charimanships and head of several bodies.
Mahathir only gave him chairmanship of Kandos.
Musa, in one his many soliloquys have said: “Dia bagi kita chairman choklat kampug saja.”
Sayang bangsa - May 21, 2010 at 8:50 am
Just a suggestion………………
When I worked for an international bank, irregular surprise spot checks kept everyone on their toes. And spot checks can happen at any time and not only once a year either! The inspectors would make their own travel arrangements and suddenly arrive at an unsuspecting branch whether in the home country or abroad and start auditing the books. Even the CEO wouldn’t know when they would come. If he arrives late, then he will be locked out of his own office, just like everyone else. And no-one can come in or go out of the branch until the inspectors have done their work or with the inspectors’ say so. Maybe all GLCs should have a flying inspection team. In contrast, when I worked for a local bank, there were no spot checks at all, not even from the central bank. As for internal audit, everyone knows when it’s going to happen and so can cover up any mess. And being in KL everyone knows through the bush telegraph when the central bank’s audit team is coming. So no surprise. And no point.
mo halim - May 21, 2010 at 6:57 pm
And even with good investment prospects and good returns, GLCs will not enter Penang simply because it is a “Pakatan-run state”… is this the directive or are the GLCs playing bodek?
Sentinel - May 21, 2010 at 7:15 pm
The message that only shareholders decide on resignations is bullshit. It is the politicians and power weilders who decide on appointment, extension and booting out, openly or from behind the scene – you bull!
K Das - May 22, 2010 at 9:15 pm