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Sakmongkol ak 47

ariff.sabri@gmail.com

Wednesday, 29 December 2010

The strange case of Benjamin Button- eh, Sime Darby.


 
SLIME SIME DARBY.
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 billion. 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 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 338 million from 4 people. It is further seeking recovery of another RM92 million. This means the total amount intended to be recovered is 430million. This will also mean that out of the 2.1 billion lost, if only 430 billion is the recoverable amount, then the loss of RM1.6 billion is considered loss from business operations. That is acceptable?
Clever, man.
You come forward to pull wool over public eye by stating with the suitable and accompanying somber tone to say- we shall recover this 430 million because of principle. People will laugh at this- because you have not fully explained how the 1.6 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.

22 comments:

Anonymous,  29 December 2010 at 01:15  

Seriously Dato..even if they can win (and I doubt as its pretty subjective and very much in the course of doing business type of issues) do they think these 4 guys can pay RM 430 mil?I think it will be tough to even recover the costs.

Its a populist reaction and meant to tell the world hoew clean the BOD is..nothing more then that.

Let them chase shadows.But myb Khazanah should instigate similar actions on DSIJ oil hedge,mAhmad Pardas Qatar misadventure,Azman Mokh Pantai fantasy and Amirsham Indo Bank mispricing.
Lets have fun belittling more Malays to justify direct negos to YTLs and Gamudas of this world.

Anonymous,  29 December 2010 at 01:22  

"Nor Yaakob who has gone crying to see Tun Mahathr, 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."

Ha, ha, ha retribution time... the cleansing has begun.

Well done, Tok Jib
You got my vote next GE.

Little Bird.

More juice here

https://www.blogger.com/comment.g?blogID=28452020&postID=9026126045017079570

Anonymous,  29 December 2010 at 01:39  

Tunggula kejap datuk. Civil suit have been initiated. Any criminal acts are under the responsiblity of the police or MACC what?. So don't jump the gun and create unnecessary doubt on the SD BOD and the goverment resolve to deal with the matter.

Shalela

umar,  29 December 2010 at 03:31  

Sime darby has been losing money since 1990s.The day they ventured into UMBC bank ( sime bank ), they lost their bearings.
Sime sembawang in Singapore has been making money all along. Sime engineering has been losing money all along in every venture in Middle east to Bakun.They are supposed to be the giants in plantation and shipping, healthcare..etc
how can such an empire fail?
they employ only the experienced and industry experts.
Merging Gutrie, Harrison Crossfield and Sime Darby plantation didn't create anything. Looks like I.O.I or KL Kepong could easily surpass the newly created large entity.
It take years to make back whatever lost. Civil suits can be challenged by engaging competent lawyers. Legal fees can be charged to profit and loss account by sime Darby. These are remnants of East India companies. The British Raj empire. They have to fade away by annual losses.The only jewel in the crown is plantation and properties sector. So any CEO has to strip the assets and go into non-core businesses to siphoon money away.Why bakun? Qatar ? Year after year they were rewarded as best CEO.How come you sue them suddenly? what about Jcorp Ali Hashim? Can you sue him after removal too ?

Fu Qihua,  29 December 2010 at 08:15  

Datoh,

The reason why most GLCs fail is because the people who were selected to manage them have no stake in them. It is not their money.

Why is Genting, YTL, Kuok, Public Bank, IOI, UP, KLK etc. not having the same problems as the GLCs?

Anonymous,  29 December 2010 at 09:37  

Dato'....this is what you get when you employ the TIKUS to repair the LABU. And now they have got Isa Samad to be chairman of Felda. Was this not the same guy that got suspended from umno for corruption not very long ago.

Dasa 29 December 2010 at 09:39  

The RM1.6 billion loss not covered under the suits is better known as tolerable level of financial loss. What a high degree of tolerence set by the Board of SD....

walla 29 December 2010 at 09:41  

http://is.gd/jFGjH (bt today only)
http://is.gd/jFGDB
http://is.gd/jFGM1
http://is.gd/jFGTn
http://is.gd/jFH17

Raison D'etre 29 December 2010 at 09:42  

SM,
Wool on people's eyes is correct. Its a laughable action and probably conjured somewhere by smart alecky consultants as a libido-enhancing boost for SD.

Wondering now how much mollah goes directly out the national (public and private) coffer into someone's pocket ever since Malaysia went Inc..

DO you have any idea?

azmo85 29 December 2010 at 10:27  

when you steal RM1000, the police will catch and the likelihood of going to prison is certain. when you steal RM 100 million, there is probably some one bigger who knows it. no one misplaces 100 million. now, a civil suit in malaysia doesn't create that much buzz in the media, as it is only followed by the rich. but a criminal suit will be a feeding frenzy.
plain and simple, those in power, who stand to lose a lot don't want their names published, as things tend to pop up in trial. and with the media's attention on it with a criminal suit, there is no telling what will happen, God forbid some big shot has to actually step down, wow what a predicament.

OneMalaysian,  29 December 2010 at 11:18  

Dear Sakmongkol

This is not the first time that Sime Darby has lost more than RM1 billion in a business misadventure. Remember they lost RM1 billion buying UMBC Bank and selling it at a great loss as Sime Bank. And they lost money on the Bakun contract. What is the common factor in all 3 cases? In all 3, Sime was out of its depth, going into businesses it knew nothing about. It has some expertise in plantations, and some in property development. But that was the limit.

In plantation – its core business – it is beaten by IOI Corporation and United Plantation in FFB yield per hectare (25-25 MT per hectare vs Sime’s 20). In property development, despite having the biggest land bank, it is beaten by IOI Properties, SP Setia; and in branding image, it is beaten by Sunrise, SP Setia, Tan & Tan and Gamuda.

Sime is big, slow, dull, inefficient and dinosaur-like. This image is reflected by a board of directors of grandees, mostly put there to pasture after having served the government in one capacity or another. Since the Board knows little of what the real business of Sime is, the CEO assumes extraordinary powers. How else can it be explained that CEOs – not just Ahmad Zubir alone – have managed to convince the Board to go along to buy UMBC, do Bakun, or venture into this oil & gas contracts in Qatar? The plantation and property businesses are really no-brainer businesses and a bit dull. So the CEO is tempted to do something exiting with the cash hoard by diversifying out of its comfort zone – into disaster. The better idea is always to return excess shareholders’ funds to shareholders so the CEO does not fall into such temptation. Shareholders can diversify their own portfolio (with the dividends) without the help of incompetent CEOs.

To place the misadventure and failings of Ahmad Zubir against the fuel hedge losses at MAS attributed to Idris Jala is a bit unfair. Zubir was incompetent. The same cannot be said of Idris Jala. I had written previously that the hedging losses at MAS must be measured against similar losses at competing airlines, which also suffered similar losses. In those extraordinary circumstances every airline had to hedge. Was it possible in 2007-2008 not to hedge at all when oil prices were running up from USD50 to eventually USD180 per barrel? Fuel cost is a major cost component for airlines. Tickets are often sold 6 months ahead at a fixed price. Therefore if you sell a ticket forward (including a fuel element in it) you must also hedge by buying fuel forward. Imagine a situation where MAS keep selling tickets forward 3, 6, 9 months at the then current price of USD 50 without covering fuel costs in the future. It would go bankrupt when prices reach USD 150 or USD 180. So MAS hedged based on USD 100 per barrel. When oil price came down subsequently it lost money on some of those hedges. But it made money on the operations because fuel for actual use was bought on spot – some low and some high. In 2008, MAS made a profit of more than RM200 million despite the hedging losses and the economic recession. This showed that Idris Jala made some competent decisions. We should applaud, not crucify him.

Anonymous,  29 December 2010 at 11:42  

seriously did NMY really went crying to Tun. more on that plzzzzzz

Anonymous,  29 December 2010 at 11:45  

Dato',

We have Institiut Integriti Negara. If we ask these people and the organisation to take the integrity test, gamaknya berapalah markah yang dapat.

To me, it is about culture. Sh Mohd Abduh went to Europe to seek refuge, he said, 'I see Islam in a non-Islamic country.' When he returned to Egypt, he said, ' I see Muslims everyehere but I don't see Islam.'

Integrity, amanah whatever are universal values. Just like plants, it need to be cultivated from good seeds. Kalau benihnya sudah tercemar, takkan pokok and subsequently buahnya top grade.

-MAKORANG-

Anonymous,  29 December 2010 at 11:45  

Let us get real, it is only to show that they are doing something.

UMNO Incorporate ans 1Malaysia, It is one in all and all in one.

Anonymous,  29 December 2010 at 13:07  

Dato...

I think they can win.

Happy 2011 Dato....

Anonymous,  29 December 2010 at 14:51  

Sime Darby cannot initiate criminal proceedings. If it is corruption, then only MACC and ultimately the AG can decide to charge the persons involved. Sime Darby can only make a report to MACC at the most.

If MACC or AG decides NFA, Sime Darby cannot do anything else. Therefore, Sime Darby's only legal recourse is to initiate a civil suit.

donplaypuks® 29 December 2010 at 15:20  

It is indeed very curious and strange that SD has proceeded with civil suits against its ex-Managers knowing full well there's zero chance of recovering these hundreds of millions of $ from them.

It suggests clearly they want to be seen as "fighting" for their shareholders and to win a PR battle with the investing public albeit after the horse has bolted!!

It also begs the question what the rest of SD's Board (maybe bored) members, Chairman and Audit Committee were doing when the losses were being cooked and why they are not jointly being held accounatble and liable for the huge billion $ losses in operating profits AND share values ($$17 per share) post merger which Musa Hitam and SD's CEO boldly, if not foolishly, then decalred as "Successful"!!??

One may also ask what the SC and KLSE are doing about it all?

dpp
we are all of 1 Race, the Human Race

Anonymous,  29 December 2010 at 17:47  

Now we all know how inefficient our entire Malaysian system is.

From running a country, a company to Universities... semua kaput at the end result.

Where have you all gone up and able to show the world... Malaysia Boleh?

Maybe only Ibrahim Alis kind of big mouths .. Malaysia boleh.

They don't even know how to fight corruption and frankly is it that difficult? Where are the sting operations to catch those guys from PDRM to government servants taking bribes?

Nothing . The only stings we know of are against Pakatan Rakyat e.g the Perak case to cause two Dun to switch camps. Surely they know , yet not doing it.

Now with just civil suits and these guys continue to enjoy the fruits of their "labour" do you think others are scared or encouraged to gasak more?

Hey, Quiet Despair. Perhaps you can advise how to handle your friends.

We sudah given up any hope. We now just join in the fun and make hay while sun shines. The end is certain. At least if we join in the fun now , we shall have cushion to last longer hehehehe.

Welcome to Zimlaysia.

Anonymous,  29 December 2010 at 22:15  

If the allege 4 people could pay 400plus million, one can only imagine the billions stashed away?

Anonymous,  29 December 2010 at 22:33  

Dato,

What's the difference between UMNO and SLIME? None because both are milking the country dry. Both of them are granted immunity against prosecution for the massive billions losses cum frauds. Both are thick skinned and thick in the head. Period.

Anonymous,  29 December 2010 at 23:12  

OneMalaysian..

How much do you know about engineering n contracting?Do you know of the escalating raw material prices 2008-2009 which caught all contractors?And do you know that many international and experienced construction outfits had similar losses as Sime .As for Bakun..a giant Chinese Co is the lead partner of the consortium.And finally..on Country risk..do you know how`many construction firms entered the Qatar mkt in the period including many from Msia.

And Sime do have a leading engineering outfit thats been active for decades.So Zubir didn't actually make such a reckless move.

For DSIJ n Zubir..they both make business decisions in 2007 that obviously came back to haunt them.

I do not idolise zubir .. obviously u idolise DSIJ. (why didn't he unwind the hedges..could hv curtailed the eventual losses?)

My point is at the top ..one lives and dies by the sword.The moment you make a wrong bet (even after decades of good bets) u get the chop.No excuses..no more glory..bye bye.Its hard but thats the way the cookie crumble.

And Zubir and DSIJ is as incompetent because both presided over huge losses.In fact DSIJ is the bigger incompetent cos his loss is double Zubir's.Thus i would not want Zubir nor DSIJ making bets with my money.

Remember Tom Peters "In search of Excellence"..i would say hindsight is definitely 2020 even for tom peters.

Anonymous,  30 December 2010 at 10:02  

One Malaysian,

Yr argument for Jala is a LOST course!

So yr explanation about Jala’s ‘catch-20’ thought process on MAS fuel hedge position is lost to them on just 2 accounts.

1st - this people is purely cocoonists.

Anyone outside their kind will be ostracized in no time, for any ‘induced’ mistakes, whether political &/or business. For their own kindred, there is only one comment – price to pay for uplifting their ‘living standard’. Despite the fact that that so called uplifting process has diluted the future prospect of their younger generation’s competitiveness.

A glaring example is someone's quoting razak as a gentleman politician of great virtue, by simply forgetting about his underhanded treatments to Tunku, the 1st PM of M'sia.

This apply to both their ‘educated’ & ignoramus types

2nd – the majority of the current generation knows NO shame, pure & simple.

They DON’T want to learn & yet wanted to jump start their career. Dr Cheng’s article on the true story of Sime Darby on BT clearly indicated this malice behaviour.

So, save yr breadth.

The way forward is for bolihland to live like Philippine for the next 30 yrs, before this group of people can procreate a new generation to compete with the WORLD.

But then can they?

30 yr is too short a time for genetic mutation on one hand. On the other hand 30 yrs of NEP has actually induced a dependency trace on their living outlook!

So the dice is still been played by the Almighty for the fate of this cave dwellers!

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