If I can quote John McEnroe again, this is the pits!
A deemed blue chip with a market capitalization that is the envy of companies locally, regionally and dare I say globally …. and we get this kind of news! clickHERE
Yes, Sime Darby said it would be making provision for losses in the region of RM964 million. But if you were to read their detailed announcement to Bursa, you will realise that the total loss is just under RM2.0 billion.
And we thought the hole created by the ex-subsidiary, SIME BANK, was bad …. you ain’t seen nothin’ yet!!
A company that epitomized corporate governance of the highest standards …. even before its merger with PNB stable of plantation/property companies …. it was thought that under the new regime of Zubir and the visionary thinking of Nor Mohamed Yakcop, Sime Darby was destined for greater things.
How wrong could we be?
And for Andrew Sheng, the Sime Darby director picked to look into these losses, to say that …..
“We have given instructions to the management to strengthen controls and manage all operations in the most prudent and efficient manner.”
……. nearly got me to puke!! This kind of statement is reserved for the small fry, fly by night listed companies that make up a miniscule proportion of the market capitalization. Not Sime Darby.
Shame on you all!!
UPDATE (15 May 2010) - Yes, Sime Darby is a Government Linked Company and whose merger with the PNB companies was the brain child of Nor Mohamed Yakcop and which caused so much consternation and aggravation.
Furthermore, the fact that the government’s investment whizz kids at Khazanah had issued all those multi coloured manuals setting out BEST PRACTICES (in key areas of governance) to be adopted by ALL its government linked companies, should have given comfort to everyone!!
And come to think of it, isn’t Pricewaterhouse Coopers the auditors? This cost issue began in 2006. Have these costs been adequately disclosed in the accounts?
Pricewaterhouse Coopers name is now constantly surfacing in major scandals …… Satyam in India, Kanebo in Japan, Goldman Sachs in the US ….. and now Sime Darby in Malaysia??
Talking about the aggravation caused by the merger, I recall Zubir effectively sacking its CFO and others including directors of Golden Hope (one of the PNB companies that was merged with Sime Darby) in 2008 for losses incurred for apparent irresponsible hedging practices on the prices of Crude Palm Oil ….. and that caused losses of several hundred million of Ringgit. click HERE
It is no wonder that there are calls for a review of Sime Darby’s group practices. I quite support this proposal but let’s make sure the consultants appointed for this task don’t tell you what you want to hear. There is a distinct tendency to do so in Malaysia!