KUALA LUMPUR, Aug 26 — Malaysia’s once-shining conglomerate Sime Darby Berhad will announce its full year results today without making headway in plugging the gaping holes that have drained funds from the plantation-to-property corporate giant.
Investors are expecting Sime to book more writedowns from its stricken energy division as it has failed in recouping some RM1 billion from its troubled oil and gas venture in Qatar.
Sime’s new chief executive Datuk Mohamad Bakke Salleh, the former Felda boss who took up his new post last July 15, has been forced to go outside the conglomerate and use an intermediary to seek some financial settlement from Qataris.
There is some irony in Bakke’s use of a middleman as one of his main grouses against previous management was the widespread use of go-betweens in settling land issues for Sime and the purchase of large tract of land in Sarawak.
But when Bakke and the Sime management announce the company’s results this evening, what they will not reveal to analysts or the public will be some unsavoury practices uncovered by a financial forensic investigation, practices which provide a peek into the nexus between government-linked-companies (GLCs) and the government.
The investigation has uncovered a trend of political considerations intruding into decision-making and political contributions. The results of the investigation are due next month.
A good example of this was the use of a connected liaison by Sime’s plantation division to purchase a large tract of land in Sarawak from the state government — engineered via the acquisition of Sarawak-based planter, Nature Ambience Sdn Bhd, for RM16.8 million.
Nature Ambience was granted approval to be the investor/developer for 26,211ha of Native Customary Rights (NCR) land in Kapit and Julau, Sarawak last October. Earlier, Sime Darby Plantation Sdn Bhd had announced an initial investment of RM100 million to develop oil palm plantations on 20,000ha NCR lands in Julau.
In the joint venture, Sime was to hold 60 per cent equity while the landowners retained 30 per cent and the Land Custody and Development Authority (LCDA) 10 per cent.
The Malaysian Insider understands that a significant portion of the land is not suitable for cultivation of oil palm.
The main question is Sime’s decision to engage a middleman when the deal involved a purchase from the state government.
Another example involves paying commissions to an Umno official to help reduce the land premium for the Kuala Lumpur Golf and Country Club, which sits on prime land in the leafy Bukit Kiara-Taman Tun Dr Ismail suburb. The land is under the Kuala Lumpur City Hall (DBKL).
These are among the issues that Bakke will have to grapple with under his leadership of the world’s No. 1 plantation company by landbank.
