August 5, 2010
Malaysian Insider : Sime Darby to report biggest ever loss
One-time Malaysian icon, the 100-year-old Sime Darby Berhad, appears to be in a downward spiral as it faces huge losses again after the last one 13 years ago, with top officials being taken off from several units.
The Malaysian Insider understands that the government conglomerate will next month announce that potential losses could top RM2 billion — and go as high as RM2.5 billion. Most of the losses are down to ill-advised investments in the energy and utilities sector in Qatar as well as tardy business practices in the development of the Bakun dam in Sarawak.
The last time Sime Darby saw red on its balance sheets came after the 1997 Asian Financial Crisis, when a plunge in the stock market and a sharp depreciation of the ringgit led its financial arm, Sime Bank, to post a RM1.6 billion loss — the largest in Malaysian banking history — for the six months to December 1997. The conglomerate went on to post a six-month loss of RM676.2 million and closed the 1998 financial year with a net loss of RM540.9 million.
It is also learnt that property division managing director Datuk Tunku Badlishah Tunku Annuar has been removed from some units within his division while other top officials are being put on notice after Sime Darby instructed former chief executive Datuk Seri Ahmad Zubir Murshid to take a leave of absence last May 13 in relation to the losses.
But hefty losses and disciplined officials aside, the group could also face crippling billion-ringgit law suits as it moves to abruptly end some of its joint ventures across the globe.
It is understood that since being appointed as the acting chief executive, Datuk Bakke Salleh has been looking at joint ventures involving Sime Darby, arguing that some of these were not as advantageous to the group as others and mooting that they be revisited or ended.
The only hitch is this: All the ventures are legally-binding, were agreed to and vetted by Sime’s legal department, and given the green light by the previous management and the board of directors. A couple of the ventures even pre-dated Zubir’s tenure as the chief executive.
Any move to end these ventures is likely to set off an expensive legal battle for Sime Darby. The conglomerate could also have an embarrassing face-off with Zubir. He has been forced to go on leave but has not quit as the chief executive.
Along the corridors of Wisma Sime Darby, there is growing belief that he will engage a lawyer to protect his interest and avoid being made the scapegoat for all the problems at the conglomerate. A slugfest in court will prove bloody for both Zubir and the board of directors, led by Tun Musa Hitam, but it could also have serious repercussions for the Barisan Nasional (BN) government.
It is widely known that government-linked companies sometimes enter into deals at the behest and urging of government leaders and political masters.
One of the chief concerns of investors on hearing the news that Bakke has been selected to steady the listing ship at Sime Darby was his relative inexperience in running a public listed entity.He has helmed Tabung Haji and Felda, where profit making were not the primary objective. In both these organisations, corporate social responsibility (CSR) is a key objective, and since occupying the hot seat at Sime Darby and meeting senior officials, the view in the conglomerate is that corporate social responsibility will enjoy equal billing with profit making, news which may not cheer investors. Officials who have met him describe Bakke as driven but impulsive.
Sime Darby closed at RM7.70 per share yesterday, falling one sen from the opening price. It has lost nearly some RM6 billion in market capitalisation since news of its troubles became public last May 13.
Malaysian Icon?
Since when did the word Malaysian come into the picture? It was pukka British icon that, like the British Empire, sat at the top of the heap.
As a Malaysian icon it has brought nothing but shame – a poor reflection of Malaysian abilities, but a good indicator of the greed and stupidity of our leaders in the corporate world that is aided and abetted by our politicians and their puerile games.
The only iconish thing about this affair is that out tokoh korporats played out their traditional crooked, thieving, and incompetent ways and ran what was a world renowned institution into the ground. This is what happens when keras are given charge of national treasures, and of late this is what our men in suits and ties seem to be perfecting into an art.
Cheers, I think.
Tan Siew Sin and Ismail Ali must be turning in their graves at the thought of what is happening to the country’s largest conglomerate.
Did you remembered the big hoo-ha when they announced the merger in the mass media? Whoooo, the lofty praises about synergy and how it will transform the company to be a “world class” player, in short a coup of sorts for the gomen ala how Sime Darby was wrangled from under the British noses !
Prior to the merger, most palm oil based corp were making good profits due to the upswing in palm oil prices. Then the gomen got greedy and wanted to sapu the whole pie and proposed the merger of the 3 largest palm oil companies in Malaysia. With allocation to big funds, it spawned greed as there’s “money” to be made in various “investments”, monies from the kickbacks that is.
Well, like all gomen projects the plan was first class thinking but the management like all gomen projects was third world quality. Since nepotism, corruption and cronyism is the trademark of GLC’s, these practices soon took over good governance and this is what it has to show the world, less than five years since the conglomerate was formed.
Such bad-ending scenario is often repeated in GLCs and one-sided contracts favoring the ‘other’ party in Malaysia- when the shits hit the fan, the gomen will then come in to bail out these GLCs. (PKFZ is one of the many cases where our ‘astute’ Ministry Of Finance insists on paying the guilty party when the outcome from the court case has not been finalized)
What can we say but …Malaysia BOLEH ! but to the eyes of the world biz community, we are akin to Zimbabwe, just a bit higher class that is and a laughing stock no doubt. Its no surprise that the FDIs are looking elsewhere to invest their funds.
Din,
Looking at ex-Politicians as Chairman of Bolehland’s Corporates & GLCs…
“Politicians are predisposed not to see spending Other People’s Money as a problem, because spending Other People’s Money is what politicians do for a living.
If politicians thought there were something wrong with it, they would be in a different line of work.
If, by some epiphany, a politician were to realize that spending Other People’s Money is wrecking our health care sector, he would be loath to point it out.
Doing so would only encourage voters to question whether spending Other People’s Money causes problems everywhere else too.” – Michael F. Cannon.
“Nominated & Appointed Cronies” CEOs, CFOs, etc, etc, etc…
They are there to “do their Shadow Master’s Biddings (guess who put them there?)…period!
Let us look at the Holistic picture to hopefully understand what “Globalisation” is all about…
Including the “Global Ills” & our Nation’s Ills, created by the Global Elites with their “Ivy League Business Schools” including Tavistock Institute “Trained” Con-Sultans/Pawns/Perpetrators/Super Butlers in every nation including the US, UK, Europe, etc, etc, etc & also in Bolehland…. towards their NWO Agenda.
Time & time again our GLC’s Top Managements seem to be “Suckered” into Multi-Million & some Billion Rgt Deals by those “International Con-Sultan” advisers…at this nation’s expense.
NEW!!! 2009 – THE ZEITGEIST MOVEMENT ORIENTATION PRESENTATION – http://www.youtube.com/watch?v=WnK5mBCFTMg&feature=related
Next to share this…
Tavistock Institute – http://hardtruth.navhost.com/tavistock.html
The Tavistock Institute, formed at Oxford University, London, …
Phi Beta Kappa – http://www.illuminati-news.com/phi-beta-kappa-and-bavarian-illuminati.html
The Big Four most interesting are Bilderberg, Trilateral Commission, Council on Foreign Relations and The World Economic Forum (or Davos Group)
Organizations – IMF, WWF, World Bank, U.N., etc.
“The real menace of our Republic is the invisible government which like a giant octopus sprawls its slimy legs over our cities, states and nation.
At the head is a small group of banking houses… This little coterie…runs our government for their own selfish ends.
It operates under cover of a self-created screen…seizes…our executive officers…legislative bodies…schools… courts…newspapers and every agency created for the public protection.”
- John F. Hylan, Mayor of New York, Mayor, 1918-1925
“The few who understand the system, will either be so interested from it’s profits or so dependent on it’s favors, that there will be no opposition from that class.” – Mayer Amschel Bauer Rothschild
“Give me control of a nation’s money and I care not who makes it’s laws.” – Mayer Amschel Bauer Rothschild
PBS Frontline Black Money Pt 6 of 6 – 09:16 – FBI Chief justifies…BAE employs 40,000 Americans…One Rule for the Elites & another for the others…Saudi Prince justifies USD400 Billion… http://www.youtube.com/watch?v=KKobqEnSNmI&NR=1
“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”
- Henry Ford
You be the judge.
Cheers.
Here throw away RM 1 billion, there waste RM 2 billion; very soon Malaysia will be the Zimbabwe of SEA.
Had enough of Sime Darby. Shall entertain myself with this song by Ms Kobayashii. If fairplay or foreplay needs an English lesson, the best English teacher is still Ms Maria Ozawa.
Din Merican, which end of the sax would you rather be? C’mon, don’t be coy about it.
Muas Hitam must go today!
Yes, the buck stops at the Exec CEO Zubir’s desk. But when you are asked to do national service (Bakun) and please PM’s who sign MOU’s on trips to the Middle East to suck up to the sheihs left, right and centre and then force GLC’s to pick up the tab, the fault lies with the Govt.
What a shame! Sime was such a beautiful company with core biz in Plantations, Health Care and Prpperty Development. Then entered the politicians. I trust this is not the beginning of the end of an icomic MALAYSIAN company!
dpp
we are all of 1 race, the Human race
What’s the problem guys? The solution is simple; get that Jala chap and he would do a MAS on SIME. Not joking this is what the the gomen should do. It will be a new feather in their cap of the Najib.
Abg Din. Here is “My 2 cent worst” opinion on Sime Darby.
To look as Sime Darby now, a person has to wear different hats to understand what is really going.
1. To Sime Darby Management, the news is old news and and already well known to the public. Dato Bakke being new in Sime Darby will be very likely want to flush all the bad losses this year with anticipating of turning it to black next year. After all no one will be blaming him on the losses at least not yet. Creative accounting also certainly help here and there.
2. For investors, the present high palm oil prices is associated with Sime Darby core business i.e. plantation; and also property because of sizable land bank is probably still an attraction. However other declining businesses is major concern that pull down profitability in near term. The pressure to sell losing businesses perhaps will be very appealing. Would not be surprised if it is already in the card.
3. For post analyst after merger, it shows significant decline in group net profitability especially plantation for FY2009 compare to FY2008. Surprisingly no one raised a red alert then. May be RM1 billion less profit is acceptable. After all it met its creative KPI as mentioned in the Financial Reporting.
For Sime Darby to catch-up its former glory, it has to make many hard cold decisions. Some decisions may not be favourable especially to the political masters and some decisions may be have to reverse post merger. The question is whether the management of Sime Darby is up to the task is yet too be seen. We need to wish them alot of luck. They need it.
Bakke Salleh still owes Malaysians an explanation on the cash drain in felda, why is he posted to Sime Darby?
Somehow I feel all the actors are merely victims. That actually it is the evil UMNO that is robbing everyone. All the commissions that are needed to be paid for all projects. All projects are conjured to legitimise all the leakage of funds which those put on the job must OK to keep their appointments.
These are done over long period and the principle manipulators being those in power at the relevant time. How to trace their misdeeds? There are no record of what had been squirreled away in safe havens.
Whats with the look East policy Mr Bean. Echoing some Leader from Malaysia’s past?
This is exactly what Tunku Ahmad Yahya wanted to prevent when Sime was under his stewardship.
Today what could go wrong with Sime Darby has gone wrong when they allow decision-making in a business conglomerate like Sime Darby to be influenced by other than economic considerations. Politics has no business being in business. This has been demonstrated time and again.
No restructuring, no rationalisation of its operations into core and non-core business operations, no re-oranization of its management structure is going to have an impact on the profitability of its operations if what is needed i.e. an obvious turn around in management philosophy keeps being ignored.
GLC’s today are synonymous to being UMNO linked . So mismanagement or hanky panky wheeling and dealing is no big surprise !! Hidden reasons behind Ananda’s recent plan to delist both Mesat and Tanjong, when PM Najib literally begged Ananda to relist a truncated Maxis only so very recently ???
Look East, Kat? A lot.
Mahathir’s Look East policy had nothing to do with his ‘love affair with everything Japanese’ and his disdain for everything western but was really a clever ploy on his part at making the Japanese feed off his hands. We won’t go into that for now.
Remember how he began his career as Prime Minister by showering accolades on the Japanese style of decision making – the ringgi shio or bottom up decision making – how clever and deft the Japanese have been with their concept of Japan Incorporated, the role Japanese small businesses play in Japan’s economy etc
Sime Darby, according to him, was poised to take on the role of the Japanese sogoshosha. Sime Darby then with its high sales turnover and thin profit margin makes according to him a good candidate in the transformation. With Sime Darby, he says, we have our own sogoshosha. We have our own Marubeni, Sumitomo and Nissho Iwai. It was then that he coined Malaysia Incorporated and dressing himself and his Cabinet colleagues to look like Japanese factory managers complete with name tags and all.
The only flaw was that the anglophiles who ran Sime Darby had no intention of abandoning their western style top down decision making.
http://il.youtube.com/watch?v=WerH7YWOmNk&feature=related
Bean,
The Doc from Kedah adopted the worst of Japanese management style…cronies associated with the LDP were heads of sogoshoshas.
When both Tun Tan and Tun Ismail were Chairpersons, Mahathir couldn’tn get at Sime’s cash pile. The management team at the time led by Tunku Ahmad was strong and professional. When Tun Ahmad Sarji and later Tun Black Fox took over, political expediency became SOP.–Din Merican
Don’t care much about the shenanigans of looking east while copying west. All music of the night to me:
This is the result when a group of aliens known as the UMNOputras who do not believe in the concept of Malaysia of different races; who made the Constitution into the biggest joke; who hijacked every business opportunities of Malaysians to themselves; who created havoc on the political, social, economic and racial scenes for the past 50 years; who introduced mafioso behaviours like stealing, murders (there are many high-profile political murders in UMNO itself), coverups and bullying on hapless Malaysians. And the leader and founder of this outfit is none other than the Kerala implant from India.
Din,
Tun Black Fox?? I like that!
That old sly black fox has a liking for foxy ladies. Anyway, I owe him one because he helped me get my first job when he was Deputy Minister of Trade – and on his official letter head too, and later when he was Minister of Education, he gave me his direct line because he was interested in the company of ladies I was keeping.
Hey guys gotta be guys!!
And with that I give you another dose of Angela Aki. Sweet dreams.
With plenty of anti-Umno vibes in the air the silence of the Umno lackeys on Din’s blog is puzzling indeed. The one biggest mistake we all committed, deliberate or otherwise, was to vote in the great Mahaguru from Kedah and allowed him to run roughshod over us for 22 years. And if the good Lord don’t intervene we’ll continue to be subjugated by his party and cronies. Oh! God help us poor souls. Amen.
Tell me I’m dreaming. Our Tok Cik says we allowed Mahathir to ride roughshod over us for 22 years. But where was Tok Cik if not riding roughshod at the back of his Cooper S during the same period? He didn’t call for Divine Intervention then.
Hey guys gotta be guys!!
Mr Bean – August 6, 2010 at 5:22 am
Thanks for the look East policy input. I remember one of the were given The Art of War book to read or something like that.
We girls didn’t say anything. of course guys should be guys , what else would they be?
Oops thats one of the MD’s ….
“Of course guys should be guys , what else would they be?” Kathy
Cross dressers, transvestites, emo, faggots …. take your pick.
Din Merican who is a man the last he had a look, has zero tolerance for faggots. Not the kind of guy to be defending the rights of gays and lesbians to marry each other.
Stupid management by stupid managers. See what is happening to many GLCs. All are losing money. Take TNB for instance, despite losing money it’s spending so much money on its own University which can never make money. The university is a flop and yet so much TNB money is pumped into it. The University is running at a deficit – almost every year. Spending is huge at the expense of TNB money. When other private universities make money this TNB university is wasting TNB money. Yet, this GLC wants to maintain a university. Is it a necessity to have a university when education is not TNB’s core business? This is one stupid example of how our managers run the GLCs. I won’t be surprised if Sime is facing all these problems. Many GLCs are also facing lots of problems. THE GOVERNMENT MUST MOVE IN AND CLEAR THIS MESS. Or else, Barisan National will lose in the next GE. CERTAIN.