On Recovering Sime’s RM2.1 billion Loss
December 30, 2010
SakmongkolAK47 on Sime Darby’s RM2.1 billion Loss: Recovering only RM430 million
For a brief moment, most of us were probably reassured at the solemnness by which Sime Darby attempted to seek retribution. They lost RM 2.1 billion; they seek to recover a total of RM 430 million.
This amount must be what the forensic auditors recommended. RM 430 is a pure loss through breach of duty and management negligence.
The balance of the loss is operational loss and can happen through the ordinary course of business operations. The balance of the loss is therefore justifiable and not subject to recovery.
I don’t know what to say — you lose this amount of money, all you can come up with, is a civil suit? How dumb can that be? Why no criminal charges proffered? Sime doesn’t know the meaning of corruption?
How will Sime seek to prove management negligence and breach of duty? Is there some golden rule, you depart from which constitutes a breach of duty? Breach of duty means what? Negligent? Then when Idris Jala lost many millions of money through his negligent hedging should be asked to pay back the money MAS lost?
Nor Yaakob who has gone crying to see Tun Mahathir, horrified at the thought that he may be shown the exit from cabinet this time, should also be asked to pay back the money he lost when speculating on our currency. There are so many examples which will readily suggest that the move by Sime to recover money through civil suits is a stupid move.
How do you define breach of duty and negligence in business matters? Some people in Sime Darby who were before that, were probably touted as exemplary managers and excellent talent, were found to have caused Sime Darby to lose RM2.1 billion.
Sime is now seeking recovery for RM338 million from 4 people. It is further seeking recovery of another 
RM92 million. This means the total amount intended to be recovered is RM 430million. This will also mean that out of the RM2.1 billion lost, if only RM430 billion is the recoverable amount, then the loss of RM1.6 billion is considered loss from business operations. That is acceptable?
Clever, man (left). You come forward to pull wool over public eye by stating with the suitable and accompanying somber tone to say — we shall recover this RM430 million because of principle. People will laugh at this — because you have not fully explained how the RM1.6 billion is a loss that is justifiable and so, there is no need to recover. Sime people think it’s their father’s bloody money which they can lose.
We find it laughable amidst this gargantuan loss; some people in the Board of Directors have no iota of shame not to resign. I have written a long time ago, the entire board of directors should have resigned at the every moment the financial scandal came to light. If they had, they would still be around to be called in as witnesses to help us discover the truth.
So despite Sime’s at first sight, laudable move, there are so many questions unanswered. We shall have to do a bit of sleuthing.
http://sakmongkol.blogspot.com/
Satmongkol is right. Besides, Petronas and Petronas Chemical should also be asked not only to explain as to how their recent IPO could be over-alloted by 372 million shares, but also be instructed to declare as to who should bear the arising loss and what actions were being meted against those responsible. It is a shame that the Securities Commission and Bursa Malaysia had chosen to remain silent on this fiasco
ALIAS DASUKI - December 30, 2010 at 9:23 am
Sime Darby’s debacle is a sham. Only a civil suit? Why not CBT or any other charges under CPC? Look at the high-profile line up of the Board of Directors – a composition of people with abundance of experience and at one or other, held key positions in the public and private sectors either as distinquised CPA, prominent lawyer, BNM Adviser, and even a DPM. In fact, Sime has the cream of the crop assembled to manage one the largest conglomerates in this country which have on records, many success stories behind it.
Yes, the entire Board of Directors should be made to resign or suspended with immediate effect to reflect the severity of improprieties of such magnitude and also to invoke collective responsibility for such losses incurred during their term of office. If necessary, charge them too if such action is justified under the law.
man-on-the street - December 30, 2010 at 10:37 am
Sime Darby dethroned:
http://right-waystan.blogspot.com/2010/05/sime-darby-dethroned.html
Solving the Sime Darby equation:
http://rightways.wordpress.com/2010/05/24/solving-the-sime-darby-equation/
Now, recover the RM2.1 billion Loss, the Supremacy!
rightways - December 30, 2010 at 11:06 am
It is sad that a company that was founded in 1910 and will be celebrating its 100 Anniversary ends the first decade of the 21st century with a whopping loss of RM2.1 billion. One has to feel sorry for the small shareholders (individuals) and trust institutions including the EPF; they suffered huge losses due to the significant drop in the price of Sime shares.
At the last AGM, one shareholder told that the Chairman that the Sime Darby Board did not know what accountability meant. He implied that the entire Board should be held accountable for the massive losses and should resign en bloc. To his credit, the Chairman of the Audit Committee, Raja Arshad, resigned and few other directors chose not to seek re-election due to their age. The remainder of the Sime Board remained including its chairman.
I am staggered by the size of the loss and also not sure whether Sime will ever recover the money. The Lawyers will earn lots of fees for their work while shareholders will bear the cost.–Din Merican
dinobeano - December 30, 2010 at 12:03 pm
If they can takeover The Kelab Golf Perhidmatan Awam in Bukit Kiara the land bank itself should be able to bil them out. Do the Civil Servants really need and expensive land bank just to play golf. That land is under utilised. I am sure that the President who is also the KSN can help them get on their feet.
thumblogic - December 30, 2010 at 12:39 pm
“I am staggered by the size of the loss …. ” Din
*hic*
Mr Bean - December 31, 2010 at 12:16 am
I don’t think any of the members of the board will resign to take responsibility. It just doesn’t happen in Bolehwood.
You can have 27 foreign tourists perished in a double-decker bus crash and the Transport Minister still talk nonsense except taking corrective actions.
You can have a policemean empty his whole magazine in a semi-automatic gun on a 15 year old boy and instead of finding solutions and explanations, they accused him of reversing his car into the pursuing cops and found a parang in the boot.
You can have a contractor responsible for building a stadium that collapsed and the next thing he gets another lucrative negotiated contract to build an expensive flyover into the new Istana Negara.
Bolehwood, semuanya pun ada…
Sentinel - December 31, 2010 at 12:59 am
Surely they can take action against the Board for under Company law for their mismanagement? Do they have an ASIC (Australian Securities and Investment Commission)equivalent back home to investigate what went worng ?
Kathy - December 31, 2010 at 5:24 am
Yes, we do, Kathy. It’s the Security Commission or something similar. The commission has taken actions against errant companies before.
But this is Bolehland. Anything connected to Umno and where it involves Umnoputras those empowered with the right kind of legislation suddenly go soft in their knees.
Had it been some miserable Dollahs, Lims or Muthus they would be dragged to the courts in double quick time. And while in police custody they would be bashed blue and black in order to get an admission.
We’re in the pits, my dear lady.
Tok Cik - December 31, 2010 at 9:38 am
Hi Tok Cik, yes thats right you have the Securities Comission. Does anything work back home? The poor Dollah’s Muthu’s and Lim’s. Some Happy New Year huh? More of the same next year?
Kathy - December 31, 2010 at 11:00 am