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 (May 27) 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 regards to operational efficiency and project management”.
Malaysians want to know the bottom-line, in particular (i) whether Sime Darby has a history totalling some RM3.5 billion write-offs; if so, why and what is being done about it; and (ii) 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.
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!
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.
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.
How can Sime Darby be saddled with such astronomical losses if it had followed the Transformation Manual and the ten initiatives which includes efforts like how to improve board effectiveness, laying down procurement guidelines and how to improve operations.
Or hadn’t Sime Darby followed the Transformation Manual and its multi-coloured books.
Either way, both Musa and Najib owe the Malaysian public a full and satisfactory explanation.
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