Research Houses are positive on new Group CEO for Sime Darby
June 15, 2010
Sime Darby : Great Challenges ahead for new Group Chief Executive Officer
Research houses OSK Research and Kenanga Research are positive over the appointment of Mohd Bakke Salleh as Sime Darby Bhd’s designated president and chief executive officer (CEO) as it has removed one of the many elements of uncertainty.
In its research note, OSK said the market was waiting to see whether Bakke would be able to straighten out Sime Darby and turn it into a respectable company.
Bakke, 56, currently the CEO of Felda Global Ventures Holdings, has the necessary experience in corporate restructuring exercises as well as management expertise in the plantation and property industries.
He was previously group managing director of Felda Holdings, group managing director and chief executive of Lembaga Tabung Haji and director of Pengurusan Danaharta Bhd’s property division.
He has also served in several companies within the Permodalan Nasional Bhd group. OSK said it was also yet to be seen if the new CEO would be given a free hand to shake up the company, in whatever way necessary, like what Idris Jala did in Malaysia Airlines.
But the fact that the Sime Darby board is yet to meet up with Bakke has left many questions unanswered.”What? The board has not met him? We find it highly unusual that Sime’s board of directors has yet to meet Bakke as one would think that the appointment of a CEO is the board’s prerogative.
“Whoever is appointed should have gone through a series of meetings with the board to ensure that he is the right person for the job,” OSK said.
Mammoth size
In the meantime, forensic investigations are still continuing on the group’s loss-making subsidiaries with the results to be made known in August.
As for its shares, OSK maintained a “sell”, saying that Sime Darby was substantially overvalued and lacking in focus. Meanwhile, Kenanga Research in its research note was also positive with the appointment but said great challenges were ahead given the mammoth size and diversified nature of the group.
“Moreover, the appointment of an outsider, we believe, is good as it signals a clear mandate for the new candidate to undertake the necessary to bring the group back to its former glory,” it said.
With the forensic audit, legal investigations and conclusion, expected by end-August, it said structural changes in management to promote a culture of ownership and accountability, strengthening of internal controls and enhancing the board’s oversight of the group have been planned.
Kenanga, however, maintains a “sell” for Sime Darby’s share. Given the lingering uncertainties associated with the group review and the time necessary to revamp the group’s work culture and processes, it said share price performance was unlikely to outperform in the near term.
A lot is expected of the new Group CEO. First, he needs a good team of reliable and professional business executives. It would be ideal if he could bring his own team to sort the mess that had been accumulating since Tunku Ahmad Yahaya, arguably the best Malaysian CEO for Sime Darby, handed over the baton to Nik Mohamed. During the Nik Mohamed era we had the Sime Bank debacle. And under Zubir, Sime Darby lost nearly a billion ringgit in its Utilities and Energy Division. Let us hope, Dato Bakke will learn from the misadventures of both Nik Mohamed and Zubir Murshid.
Second, out goes Musa Hitam and Ahmad Sarji and the rest of the directors, and there must be a new Board headed by a competent and business savvy person like Dato Khatijah Ahmad as Chairperson to help Dato Bakke make drastic changes in this mammoth company.
It is understood that some senior executives will likely leave because they will not accept this change of leadership. That, however, should be positive since new CEO needs to refocus Sime Darby and cannot afford to have internal opposition to his restructuring plan.–Din Merican
dinobeano - June 15, 2010 at 9:20 pm
The research house are positive about the new CEO but maintain a sell outlook on SD??!!
That sure look like typical broker’s double speak and CYA (cover your ass) don’t it?
The combined shares prices of SD, Golden Hope and Guthrie before the (in)famous merger was in excess of RM20!! Today, its about $7.80 after hitting a peak of just over $13 post merger
And you can be damn sure that’s due to gross mismanagement, fraud and dereliction of duty by Musang Hitam and his Board of Directors and very, very little to do with market conditions!!
And there’s more write off coming from the Middle East!!
Sack the whole bloody lot, NOW!!
dpp
we are all of 1 race, the Human Race
donplaypuks - June 15, 2010 at 9:20 pm
positive as in lip service only. i also greet both my neighbours ‘good morning’ before i leave. but, dpp, they can sack the whole team if it is only a movie production. ‘they got guts’, but they are toothless.
klik - June 16, 2010 at 12:00 am
Din, if OSK is so cocksure of this new CEO, they should walk the talk and change their advice to either “HOLD” or “BUY” but why still sell?
Has OSK investigated the roleof this CEO in the allegations that FELDA’s cash reserve dwindled from RM4.5 billion to RM200 million? If not, then its analysis is incomplete and biased. The research must be complete.
Sentinel - June 16, 2010 at 12:00 am
it’s like gobind calling najib a murderer in parliament, but, did najib dare to challenge? he just walked away. and noe with this felda bilions “ripped off” by him and his wife and croonies, you and all of us know.
I know I might be juvenile, but, what the fuck do you want to take our country’s monies out and put it to where you cannot remember?
1 ringgit buys you a roti canai, and that lasts 1 day. must you have steak on a daily basis?
i do not get myself wrong, but to siphon money out of the country is worse than treason? no?
klik - June 16, 2010 at 12:22 am
klik, siphoning money out started with the first traders that came to our shores. This current generation of thieving politicians are only doing what their forefathers have done generations before. When I was living in Buenos Aires, Mahathir was busy investing Malaysian money buying up cattle ranches and several country mansions to boot. Now you can say WTF, is he doing that for. Apparently (and I know this from a direct source), he claimed that KL didnt have enough open ground for a good gallop.
Back to the article above, I find it unbelievable that the SD board have not met, appraised, interviewed and appointed the current incumbent. I can only take that to mean that this is another attempt of claiming non-accountability.
OSK and Kenaga must be sharing the same crystal ball. Their conclusions are predictable.
emmie - June 16, 2010 at 12:51 am
“Now you can say WTF, is he doing that for. Apparently (and I know this from a direct source), he claimed that KL didnt have enough open ground for a good gallop.” emmie
A good gallop comes with a good wallop. He figures that Buenos Aires is a better alternative to Patpong.
Mr Bean - June 16, 2010 at 2:05 am
“It’s like Gobind calling Najib a murderer in Parliament, but, did Najib dare challenge? He just walked away.” klik
Gobind expected to rile the guy up and was hoping he would take the bait and challenged him to repeat the same out of Parliament and away from the protective garb of Parliamentary Privilege. The guy is not stupid.
Mr Bean - June 16, 2010 at 2:12 am
” A lot is expected from the new GROUP CEO. First he needs a good team of reliable and professional business executives “. – din merican .
Din , after Dr Mahathir’s ” Kepimpinan Melalui Teladan ” do you expect to find any reliable and professional executives ?
Second , there are senior civil servants ( both retired and currently serving ) like Tan Sri Ramon Navaratnam and Dr Yeah from Rating Agency Malaysia , who are willing to prostitute themselves by suscribing to the government’s call for subsidy reduction or elimination but willing to say nothing about corruption which has reached endemic proportions in this country .
So now Din , tell me where do you find reliable , honest and professional executives nowadays . You only find ” reliable and professional CROOKS AND PETTY THIEVES and of course
prostitutes ” and all are of course a product of 22 years of KEPIMPINAN MELALUI TELADAN .
samad ali pitchey - June 16, 2010 at 6:31 am
And if i may add En Samad , while the reliable and professional crooks and petty thieves rip and rape the national coffers with the song ” my way ” in the background , the prostitutes go about providing the chorus. Unbelievable !
peach ann nacion - June 16, 2010 at 7:14 am
Since Bean still at Patpong and Buenos Aires, where he is trying to sell his Kobe beef, why not we also talk about the real business at both places. Yes, we are talking about Prostitution. Hey, why not?
Look! The great old man of this country is arguing for gambling to be a source of income for the government. When gambling is a legitimate source of income for the government then why we must stop at gambling. We might as well make money from PROSTITUTION.
No we don’t want to be in the same class of those in Patpong or Buenos Aires. Our prostitutes must be world class. We must start by making the following statement;
Quote “President and group chief executive Datuk Seri Ahmad Zubir Murshid said the new Sime Darby, which will re-list tomorrow, strongly reflected the long-standing brand and equity market values as a conglomerate with multiple core businesses locally and internationally.
On a potential discount on Sime Darby given its status as a non-pure plantation player, he said: “I feel strongly that we are in the balance cycle of our core businesses.”
Yes, we must use the powerful words such as “long-standing” Multiple ogasm”
tean - June 16, 2010 at 8:19 am
…”Synergy Drive” etc.
In line with our core business the Chairman must also be renamed from the fame ” elegant silence” to “elegant suckers”.
tean - June 16, 2010 at 8:36 am
We are sure running out of top executives talent. Internally, SD should have had a succession plan in case anything happened like how GE Welsh had at least 3 most trusted people that he could choose from when he retired. SD surely lacked that
I guess thats why they are having this Talent Corp hey.. It really is a long way to go
yusof - June 16, 2010 at 9:03 am
“We are sure running out of top executives talent.” Yusof.
Can’t agree with you there. If the politicians don’t interfere, they cast their net wide enough and open the CEO’s post to meritocracy, you can easily find hundreds who will do a good job of it.
We must get rid of this notion that GLC’s can only be headed by Bumis!!
dpp
we are all of 1 race, the Human Race
donplaypuks - June 16, 2010 at 1:04 pm
“We must get rid of this notion that GLC’s can only be headed by Bumis”- donplaypuks
That is the price Malaysians pay for voting to continue a maligned Race-based ONE PARTY STATE. In this respect, China is slightly better than Malaysia because the communist old men will not discriminate between a Han Chinese from a Hui Chinese or a Uigher Chinese , as long as you are a Chinese national, unless you want to secede from China.
Frank - June 16, 2010 at 7:24 pm
A Kadir Jasin has this to say about Sime Darby’s debacle:
“It’s good that the powerful Sime Darby Chairman,Tun Musa Hitam (aka Musang Hitam), got the drift. On May 20, he told the Press that he had no qualms of stepping down as the chairman of Sime Darby if the board is proven to be accountable for the debacle… I wonder if Musa and his fellow board members should wait for the outcome of the investigations being conducted or resign on bloc now to facilitate the exercise.
They cannot possibly plead ignorance when such spectacular losses were incurred under their watch. They could claim that some of the projects preceded their appointment, but what about the mountain of positive news and predictions that they attested their signatures to during and after the mega-merger?
If not all the directors, some have been around before the merger and they should be held accountable along side the disgraced Ahmad Zubir. Sacking on the CEO makes it appear as if he is being made a scapegoat…This is about amanah (trust)–figuratively and literally.
Losses at Sime Darby are bound to affect the country’s premier Bumiputera trust agency, Permodalan Nasional Berhad (PNB), and millions of its unit trust investors. Sadly for PNB and its unit trust investors, who were seen unwilling participants in the 2007 merger, which was purportedly to create the world’s largest palm oil producer, the marriage has instead turned out to be a nightmare. It may not be the largest publicly-traded plantation company in the world, but its still substantial non-core businesses have clearly caused its temporary fall from grace.”–Malaysian Business, June 1, 2010
Mahathir would be pleased with Kadir Jasin’s commentary since it is known that he and our Musang have been at loggerheads since the day the latter resigned as Deputy Prime Minister in the so-called 2M Administration in the 1980s.–Din Merican
dinobeano - June 16, 2010 at 10:12 pm
Frank,
“because the communist old men will not discriminate between a Han Chinese from a Hui Chinese or a Uigher Chinese” not true Frank. In my community we have several Uigher families that have fled China and being givn asylum by the US. They have suffered under the “communist old men”
Every country will have some form of discrimination no two way about it, even in the US despite their Affirmative Action statement “we don’t discriminate based on age, color, creed, national origin, sexual orientation….” it is still happening.
semper fi - June 16, 2010 at 10:57 pm
Tan Sri Hassan Marican will made a good Chairman for Sime Darby.
____________
Kusoh, I agree. He will be better than the Musang. But the Board is not a one man show. You need all directors to be competent, knowledgeable and effective and act as one team. Tan Sri Hassan Marican should be allowed to recommend people who are qualified to be on the Board, if he is Sime’s Chairman.–Din Merican
KUSOH - June 17, 2010 at 12:58 pm
Semper fi
I did say about those wanting to secede from China. I think those who sought asylum in US were Uighers from Xinjiang province, the current hotspot in China. They left not because they were discriminated as Uighers but because of the separatist and political movements in Xinjiang province.
I spent a month in Urumuqi in Xinjiang about 12 years ago. True the Bejing communists were trying to flood Xinjiang with Han chinese through forced migration ( Mao’s policy) but I did not see any suppression of Uigher culture there, and many of the authorities I talked to were Uighers, albeit who were members or cadres of the Chinese Communist Party and not the separatist Uighers.
Frank - June 17, 2010 at 2:29 pm
Yes Frank, I read the cessation part. It’s not just the Uigher even Tibet is embroiled in a cessation fight. Similarly GAM is seeking the same for Aceh.
semper fi - June 18, 2010 at 6:46 am
Sime Darby is not in the business of maximizing returns to shareholders. Sime is in the business of maximizing the wealth of selected umnoputras and bumiputras.
james - June 19, 2010 at 11:29 pm