16 Nov 2010
MACC, SC probe Sime Darby after getting forensic audit
“The investigations are confidential,” a senior MACC official told The Malaysian Insider, declining to give further details.The forensic audit report was due to be released in September but the board decided to keep it confidential and submit it to the authorities for further investigations and possible action against former senior officials.It is learnt that the board meeting today could shed more light on details of the forensic audit.
The government-linked group turned in a net profit of RM726 million for 2010 despite reporting a fourth quarter net loss after tax and minority interest of RM77.4 million.
Sime Darby reported RM1 billion in net profit for the fourth quarter of last year and a net profit of RM2.3 billion for the whole of 2009.The E&U division reported an operating loss of RM1.7 billion for 2010 after making additional provisions of RM777.3 million for the fourth quarter.
The last time Sime Darby saw such a large loss at one of its units came after the 1997 Asian Financial Crisis when a plunge in the stock market and a sharp depreciation of the ringgit led its financial arm, Sime Bank, to post a RM1.6 billion loss — the largest in Malaysian banking history — for the six months to December 1997.The Malaysian Insider had reported on August 5 that the government conglomerate would announce that potential losses could top RM2 billion — and go as high as RM2.5 billion due to ill-advised investments in the energy and utilities sector in Qatar as well as tardy business practices in the development of the Bakun dam in Sarawak.
The lower group profits and huge provisions at its energy and utilities division will likely add pressure on acting chief executive Datuk Bakke Salleh to turn around the GLC.Sime Darby’s 2010 earnings fell short of analyst consensus forecast of a profit of between RM1.3 billion to RM1.5 billion excluding fourth quarter provisions.
Sime Darby said that to achieve a more focused management approach to the E&U businesses, the division is now segregated into China and non-China operations with two different executive vice-presidents to oversee each respective business. New appointments have also been made to key management positions in the E&U Division.
The plantations to power and property conglomerate has also reviewed its organisational and reporting structure to enhance divisional oversight and accountability across the group.
Bakke had said that Sime Darby will revert to its original corporate structure by establishing a wholly owned anchor or flagship company for each of its six divisions. Each will have its own board staffed with directors from the main board as well as independent directors and industry experts.
Source : http://www.themalaysianinsider.com/malaysia/article/macc-sc-probe-sime-darby-after-getting-forensic-audit/