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26 May 2010

Musa must reveal all on Sime Darby, says Kit Siang

Lim Kit Siang called on Sime Darby Chairman Tun Musa Hitam today to reveal the full report of the company’s task force on the cost overruns of its energies and utilities tomorrow.

The DAP veteran politician said that Sime Darby should fulfil its promise to reveal “all relevant disclosures”.

“Sime Darby Chairman Tun Musa Hitam should make public the full report of the Sime Darby Task Force on the cost overruns of its energies and utilities division tomorrow and should not withhold any information from the Malaysian public, as they are the ultimate shareholders of the GLC conglomerate.

“Sime Darby had earlier promised on its website that ‘all relevant disclosures’ will be made with the world’s biggest-listed palm oil producer’s third quarter results tomorrow but what Malaysians want is not a second-hand account but the full uncensored report of the Task Force on its energies and utilities division’s difficulties and challenges, especially with regard to operational efficiency and project management,” he said in a press statement.

He said that the public wants to know the reasons why the country’s second company by market value is in its current financial status.

“Malaysians want to know the bottom-line, in particular whether Sime Darby has a history totalling some RM3.5 billion write-offs; if so, why and what is being done about it; and whether Sime Darby has incurred more than RM1 billion in cost overruns from carrying out a civil works contract for the Bakun hydroelectric project, with one estimate putting the total cost overruns at RM1.7 billion; and whether it is true that the government has agreed to reimburse around RM700 million to Sime Darby, leaving the group with around RM1 billion to deal with,” he said.

Sime Darby president and group chief Datuk Seri Ahmad Zubir Murshid was asked by the board to take a leave of absence prior to the expiry of his contract in Nov 26, 2010, after the discovery of RM964 million in cost overruns from four energy and utilities projects — including the Bakun dam project — racked up by the company during his tenure.

Former prime minister Tun Dr Mahathir Mohamad has called for all of those involved in the growing scandal to be punished, and not just Ahmad Zubir.

Dr Mahathir alleged that the actual cost overruns from the four energy and utilities projects totals RM1.8 billion.

While offering to resign, Sime Darby chairman Tun Musa Hitam has launched an ongoing investigation into the troubled company as further speculation will affect its share price. He did not, however, provide greater details on the internal probe.

The probe, which was previously confined to the conglomerate’s energy and utilities division, is now expanded to five other business units — plantations, property, healthcare, automotive and industrial divisions.

He added that Musa’s credibility and reputation is at stake.

“Musa should know that for the first time in his public career, his reputation for credibility, accountability, transparency and integrity is on the line, with commentators castigating him and the Sime Darby Board members as having ‘zero integrity and zero credibility’.

“Musa should be able to understand not only shareholder, but public disgust and anger as one of the country’s bluechips have overnight transformed from a ‘overperform’ to ‘underperform’ stock, and the term GLC (Government-Linked Company) is fast gaining a new meaning – ‘Government-Losing Concern’ – thanks to Sime Darby!” he said.

Lim reiterated his calls for Prime Minister Datuk Seri Najib Razak to table a White Paper explaining the multi-billion ringgit cost overruns by conglomerate Sime Darby Berhad at the June 7 Parliament sitting.

”The responsibility on public accountability and transparency does not rest solely on Musa’s shoulders but also on that of the Prime Minister, Datuk Seri Najib Razak.

”This is why Najib should present a preliminary White Paper on the Sime Darby fiasco when Parliament reconvenes on 7th June, explaining in particular what it meant to the ten-year GLC Transformation Plan since 2004,” he said.

Lim also pointed out that government link companies (GLCs) are “retarding” instead of steering the economy.

“Instead of growing GLCs to drive the country’s economic growth, the GLCs are becoming public burdens as ‘Government Losing Concerns’ retarding the country’s plan to become a high income country to escape the decade-old middle-income trap.

“The GLC Transformation Plan sets out a GLC Transformation Manual, KPIs or key performance indicators with 10 initiatives and multi-coloured books like the Red Book on procurement practices and the Purple Book on optimizing capital management practices,” he said.

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