Felda’s Bakke to start in Sime tomorrow

July 14, 2010

It was unclear what position Bakke would fill at Sime Darby.

Felda Holdings Bhd group managing director Datuk Mohd Bakke Salleh is scheduled to start work at the troubled Sime Darby Berhad tomorrow and is heading into a conglomerate that is on the ropes with financial and personnel woes.

Company sources suggest that Datuk Seri Ahmad Zubir Murshid has not stepped down as president and group chief executive, raising questions as to what position Bakke will occupy. Zubir was asked to take a leave of absence following financial losses in the conglomerate.

To compound matters, several senior officials, including plantation chief and acting group chief executive Datuk Azhar Abdul Hamid, have signalled that they are walking away from company as early as November when their contracts expire. All top executives in the Malaysian corporate giant are on contracts after the 2007 mega-merger.

Azhar had reaffirmed staying on until November at a company town hall meeting last Friday, where he stressed he would not resign despite the Sime Darby board announcing Bakke’s appointment on June 14.

Also in the mix is what officials call a witch-hunt against several top executives associated with Zubir, including a top performer.

All these dynamics and a discredited board of directors are likely to be major obstacles as Bakke attempts to stanch the nosedive at this Malaysian icon that was revealed in May.

Najib maintains that Sime was on stable financial footing. — file pic

When contacted, a Sime Darby spokesperson said they were unable to confirm whether Bakke would “be coming in tomorrow”.

“Yes, you are right, Datuk Seri Ahmad Zubir is on leave and remains an employee of Sime Darby. He will continue to assist us in investigations into the losses at the Energy and Utilities Division. In his absence, and until Datuk Bakke comes in, Datuk Azhar will continue as the Acting GCE,” the spokesperson said in an email to The Malaysian Insider.

The conglomerate’s troubles surfaced when Sime Darby had revealed that its energy and utilities division had incurred cost overruns on four projects over the last few years, involving the building of oil and gas installations in Qatar, the Bakun hydro-electric project, and a marine project involving the construction of vessels for use in the Qatari project.

As a result of making provisions to the tune of RM964 million in the third quarter ended March 31, Sime Darby suffered its first quarterly loss since the 2007 mega-merger.

The third-quarter net loss totalled RM309 million and nudged its nine-month net profit to RM804.2 million from RM1.3 billion a year ago.

Prime Minister and Finance Minister Datuk Seri Najib Razak yesterday rubbished reports of Sime Darby Sdn Bhd being in shaky financial position, claiming that the government-linked company were still financially stable.

In a written reply to Petaling Jaya Selatan MP Hee Loy Sian, Najib informed Parliament that Sime Darby had recently reported a pre-tax profit of RM1.7 billion and a net profit of RM804 million for its first three quarters of its 2010 financial year (FY10).

“On the whole, the financial position of Sime Darby is still stable with pre-tax profits of RM1.7 billion and net profits of RM804 million for the first three quarters of the financial year 2010, contributed by the conglomerate’s plantation, industrial, property and motors sectors,” said Najib in the written reply.