Not many may recall Ismail Zakaria.

One couldn’t even easily get his photo online until Malaysian Business Times published it recently.

Ismail Zakaria’s name then (up to the late 1990s) was so highly thought of that he was actually touted for the position of CEO of Maybank, which he eventually lost to Ahmad Don.

Ismail Zakaria (or IZ as he is known), joined Sime Bank as CEO after a short stint with RHB Bank.

But what we read about now is IZ’s acquittal from court charges of acting beyond his authority in lending up to RM175m to companies back in the late 1990s when CEO of Sime Bank, a subsidiary of Sime Darby Berhad.

Sime Bank was previously UMBC Bhd (United Malaysian Banking Corporation Bhd).

It’s amazing that such a matter would take over a decade to be dealt with ….. and even that, at the level of the Session’s Court!

But I do recall of the amazement at the way monies were expended by a bank supposedly controlled by a world renown company with fantastic governance and checks & balances – SIME DARBY BERHAD.

It is equally amazing (and galling) that in a relatively short period thereafter, we could witness the same scenario in Sime Darby’s Oil & Gas Division …… losing close to RM3.0 billion resulting from slip-shod management practices.

Actually, my point in this posting is that Malaysia’s corporate mentality still seems to be very much that if one appoints a high profile individual as CEO to a company ……. it is bound for success.

The actual track record of that person appears to be secondary.

As long as he/she has had their profile raised, CV’s polished, references ‘corroborated’ …… they appear acceptable, so to speak.

That seems to be the case for IZ then ……. and we seem to see it even to this day?

Look at the short-list for the Managing Director’s post for MAS as reported.

They were Ahmad Jauhari, Rashdan Yusof, Kamaruddin Meranun and Shazali Ramli.

Just what exactly has each and every one of them actually achieved?

Ahmad Jauhari was a member of the Sikap Power team that got the mandate to build an IPP plant in Port Dickson.

Naturally, it would be built and financed by others and resulted in the project being flipped first to MRCB and then to Malakoff.

Those who originally got the mandate would make a ‘killing’ from the flipping!

Ahmad Jauhari, then spent a time as MD of Malakoff, whose control (vide MMC)  by then had moved from the government to UMNO financier Syed Mokhtar Al Bukhari.

As for Rashdan Yusof ….. besides being with an audit firm and then the Thinking Company (Bina Fikir), Rashdan was also a director and shareholder of listed company, Megan Media Berhad, which collapsed so calamitously around the same time as Transmile Berhad.

And what about Kamaruddin Meranun?

Before he got his break, thanks to Snake Charmer, Tony Fernandez, what did Kamaruddin Meranun actually achieve?

He did spend some time with the Innosabah Securities Bhd Group, a stock broking firm in Sabah with subsidiaries involved in related activities eg. options and futures.

Innosabah collapsed under the same exposure that Sime Bank had then!

As for Shazali Ramli, well, he’s an apparently good marketing man especially known for his oily rolled back hair!!

Therefore, there seems to be a serious dearth of good quality CEOs for the Malaysian corporate community!

Or is it that the post of MD for MAS was earmarked for a pliant, financially secure individual who would do the bidding of the puppeteers behind the scene?

Just like Ismail Zakaria?

Ex-Sime Darby Berhad CEO, Zubir Mursid, who is facing his own court charges, must be quite positive with IZ’s acquittal.

Click HERE for BTimes report on IZ’s acquittal.



Aptly named “The Malaysian Insider” has released breaking news that a restructuring for Malaysia Airlines (MAS) is in the works …….. that will also feature (surprise, surprise) Snake in Suit, Air Asia’s Tony Fernandez! 

Recently, Malaysia Airlines appointed Tan Sri Md Nor Yusof as chairman in place of Tan Sri Munir Majid.

Tan Sri Md Nor was the Managing Director of MAS when it embarked on its “WAU” i.e. Widespread Asset Unbundling exercise in 2002 which essentially saw the Malaysian government bailing out the company by taking over MAS’  liabilities (and the planes).

The planes were then leased back to MAS.

Essentially this helped prevent MAS from ‘going under’ due its heavy repayment obligations.

If you can recall, the “WAU” was the brainchild of a boutique adviser called BINA FIKIR, whose main owner, Azman Mokhtar, is now the Managing Director of Khazanah, the investment arm of the Malaysian government.

So why is MAS requiring to be rescued again in less than 10 years after being bailed out by the government?

With the government company, Penerbangan Malaysia Berhad, taking over the financial burden of MAS, should MAS be requiring another rescue notwithstanding the competition from the likes of other airlines and Air Asia?

Singapore Airlines is still profitable inspite of the global competition for passenger traffic.

MAS, like Singapore Airlines, has got a good brand …….. has been winning awards every year ….. had a ‘great’ MD in Idris Jala who is now Malaysia’s Minister in charge of its Performance Management & Delivery Unit ……. so why is it still in the doldrums?

One basic problem is that when individuals are put to helm these companies, the limitations placed on them are so enormous that it would have been IMPOSSIBLE to get those companies out of the quagmire! Click HERE for an elaboration.

Idris Jala was smart enough to jump ship after (I was told) painting a rather rosy picture of a company that he is leaving behind!

Maybe Idris Jala can reply to the many questions from this deal as asked by the MP from Wangsa Maju. Click HERE

And when these companies implode, the powers to be quickly carry out stop-gap measures …… not so much to address the fundamental issues ……. but to hide the obvious embarrassing issues that caused its demise in the first place.

In MAS’ case, Tony Fernandez appears to have been ‘directed’ to do the necessary by covering up the ‘shame’!

After all, his company’s shares have been supported strongly by the government agencies e.g. EPF that from a meek price of about 70 sen, Air Asia’s share price is now touching RM4.00.

On another note, MAS’ predicament also appears to be due to the tight-fisted position of the Malaysian government ….. resulting in Penerbangan Malaysia Berhad being unable to continue supporting MAS.

This may explain why MAS’ latest accounts surprisingly show planes worth RM6.0 billion in its books and financed by borrowings.

Under the WAU arrangement, the planes are to be in the books of Penerbangan Malaysia Berhad, not MAS!

Is Tan Sri Md Nor Yusof’s appointment actually to protect the banks’ loans (presumably including CIMB) to MAS?

It surely doesn’t make good reading for the financial position of Malaysia’s government coffers ….. especially when the United States of America’s financial standing has just been down-graded from AAA to AA+ by a rating agency.

Click HERE for The Malaysian Insiders take of the airlines’ share swap.


When I read recently about the examiner’s report on events culminating in the demise of Lehman Brothers, it did not really surprise me to hear about the corporate and accounting sleight of hands to ‘cover up’ the true financial position of the organisation.

Cynically, it is like someone whose occupation is to advise clients how to fudge their books and who is now actually doing it himself in order to artificially justify his existence!

This is the concern about the role of consultants the world over. Do they actually provide value add propositions or are they just glorified goons who provide a way for their clients to justify taking certain self interested decisions ….. supported and justified by these so-called consultants?

It is a well known fact that since Boards of Directors are loath to make decisions on their own ….. they use high-flying consultants to justify the decisions of the directors.

And if these consultants are to be paid on the basis of getting approval for the deals, how can they not work towards it? 

Yes, there are independent advisers appointed for most of these deals …… but who appoints them? It’s the ‘self interested’ company directors themselves.

This reminds me of a local Malaysian deal involving an investment bank that took place a few years’ ago but is now being re-examined by the hind-sight analysts!

The local bank was apparently ‘encouraged strenuously’ to employ a particular individual as its CEO. However, he was already heading a boutique consultancy which he also owned.

So a deal was cut for the local bank to wholly acquire the boutique consultancy from him for a tidy sum after which he would join the local bank as its CEO!

Now the question is what is in it for the local bank to buy the boutique consultancy? Why was there a premium paid over and above its apparent net value? After all, the aim was to recruit the individual. 

To insinuate that the boutique consultancy had a valuable brand, a ‘fantastic’ track record and could provide keen competition to the local bank is at best ……. laughable!

Whilst trying to give as much of the benefit of the doubt to the deal, let us accept at face value that the final consideration for the boutique consultancy will be based on what is actually collected from the consultancy’s debtors, which was estimated at RM8.0 million.

The final audited sum was RM5.24 million.

However, the amount paid to the CONSULTANT was RM5.99 million. Why was he paid a premium of RM0.75 million?

Justifying the premium paid by saying that post acquisition profits of RM0.93 million was achieved by the boutique consultancy is mischievous as it had already been subsumed by the local bank.

It was riding on the name of the local bank ….. otherwise the local bank would have undertaken a name change into that of the boutique consultancy!!

Hello, the local bank was doing him a favour (as a result of the ‘strenuous encouragement’) to acquire the boutique consultancy at net earning value and yet had to sucker out an additional RM0.75 million!!

With these kind of kinky deals taking place, it may be an idea to appoint independent advisers whose fees are to be paid only on condition that they can justify AGAINST the terms of the deal being proposed to  the company. As a result, the KPI of the independent adviser is clear and will not be inhibited in any way.

In addition, the independent adviser might even be ‘encouraged’ to uncover skeletons in the cup-board of interested parties such that a steep DISCOUNT (rather than premium) be paid for many of today’s deals or have the deals scuppered altogether!

UPDATE: Yes, I have been reminded that the CEO has since decided to resign from the local bank to go for better things (or possibly cover)! What kind of deal is this?

The local bank bought the boutique consultancy to enable the owner to join the former as CEO. And when the buy-over is legally completed, the CEO resigns! This is preposterous!!

Legally and morally, the premium of RM0.75 million should be refunded to the local bank.