Extracted from Malaysiakini

Sime Darby finds foul play in energy projects

Sep 21, 10 2:43pm

Sime Darby Bhd says their forensic and legal consultants have found “prima facie” evidence that there may have been foul play in several of the government-linked conglomerate's projects in the energy sector.

Sime Darby in a statement to Bursa Malaysia said their board of directors has decided to initiate legal proceedings and lodge reports with the relevant authorities.

“The forensic consultants were appointed on May 27, to conduct forensic audits into the projects and an independent legal consultant to follow-through investigation to determine whether there is any evidence of culpability.

“The investigations found evidence to suggest on a prima facie basis, that there may have been breaches of duty and obligations and inappropriate conduct,” the statement said, adding that their legal counsel has advised the board to keep the details confidential.

According to the company, the four key projects by their Energy and Utilities Division that are being investigated are the Bulhanine and Maydan Mahzam project with Qatar Petroleum (the QP Project), the Maersk Oil Qatar Project, the Bakun hydroelectric dam (right) project and the 'Marine Project'.

The forensic auditors Delloite and KPMG were asked to conduct the probe after Sime Darby - the world's largest oil palm company with businesses in the property, industrial, energy and utilities, as well as healthcare sectors - recorded heavy losses.

The forensic and legal consultants submitted their findings to the board yesterday.

RM1.752 billion divisional losses

Sime Darby has been under the microscope since its Energy and Utilities division disclosed a devastating loss of RM1.752 billion for the financial year ended Jun 30, 2010, after making total provisions of RM2.085 billion.

Despite this, the conglomerate announced a pre-tax profit of RM1.7 billion for the same financial year, a 43 per cent dip to its profit recorded during the previous financial year.

The Malaysian Anti Corruption Commission (MACC) had sometime in May interviewed then acting president and chief executive officer Azhar Abdul Hamid for three hours, as part of its investigations into the massive losses incurred by the Energy and Utilities division.

Earlier, the company's board had asked former president and group chief executive Ahmad Zubir Murshid (right) to go on a leave of absence with immediate effect, prior to the expiry of his contract on Nov 26.

Sime Darby's board cited concerns with regard to the management and internal controls of the group as reason for the move.

Since the debacle, Mohd Bakke Salleh, who was previously from Felda Bhd, has been appointed as Sime Darby new chief executive officer.