Sime Darby: Developing Sustainable Futures
Sime Darby welcomes new Board members
KUALA LUMPUR, 16 November 2010 – Sime Darby Bhd Chairman Tun Musa Hitam said the company is pursuing legal action in matters pertaining to losses suffered at the Group’s Energy & Utilities Division (E&U Division).

At the Group’s fourth annual general meeting (AGM), Musa read a statement to all shareholders and said that reports have been lodged with both the Securities Commission (SC) and the Malaysian Anti Corruption Commission (MACC). “We will have to leave it to the SC and the MACC to take this further. As you know, criminal action is not within the purview of the company but in the hands of the authorities. Our role is to cooperate with the authorities and we have done so and will continue to do so as and when required,” Musa said. “These two bodies have informed us that they are conducting further investigations. It is because of these on-going investigations that we are unable at this time, as advised by legal counsel, to make the (information in the reports) known to you. The board has been advised by legal counsel to keep confidential the details of the report and nature of such proceedings so as not to adversely affect the interests of the Group.”

The Board of Directors of Sime Darby established the Investigative Reports Review Committee with Tan Sri Samsudin Osman as the chair on 6 July 2010. This committee was set up to consider and review the draft Investigative Review Reports that were prepared by forensic and legal advisors appointed by the Board with respect to the projects of the group’s E&U Division. The Committee was to report any prima facie findings of culpable conduct and whether there was possible civil action that could be taken against those culpable. The final report of the external consultants was submitted to The Committee on 14 September 2010 and was considered by the Board on 20 September 2010. At this point the Board was advised by legal counsel that the findings of the forensic audit should not be released.

“What I can tell you is: (I) civil action is being taken by the company; (II) it is expected that we will commence our legal proceedings before the end of the year and (III) in the forensic report, the advisors have identified individuals with prima facie culpability,” Musa said.

On 13 May 2010, the Board announced that the Group would have to make provisions of RM964 million in respect of four projects in its E&U Division. On the same day, President and Group Chief Executive Dato’ Seri Ahmad Zubir Murshid was asked to take a leave of absence. The Board also announced that a Work Group had been set up in October 2009 to review the operations of the E&U Division after its performance in the year ended June 30 2009, particularly in respect of the Qatar Petroleum project. The scope of the work group was extended in February 2010 to cover the Bakun hydroelectric dam project, the Maersk Oil Qatar project and a project concerning the construction of marine vessels. The Board deliberated on the findings of the Work Group on 12 May 2010 at a 13-hour board meeting. In the interest of transparency and good governance, the Board decided to reveal the recommendations of the Work Group the next day.

On 14 June 2010, The Board announced the appointment of Dato’ Mohd Bakke Mohd Salleh as Acting President and Group Chief Executive. Mohd Bakke took office on 15 July 2010.

At the announcement of its results for the financial year ended 30 June 2010, the Group announced total provisions of RM2.08 billion at E&U.

Today’s AGM saw the re-appointments of Tun Musa Hitam and Tan Sri Dato’ Dr. Wan Mohd Zahid Noordin as Directors of the Company. They were both unanimously re-appointed.

Meanwhile, three directors of the company were reelected to the Board. They are, Tan Sri Datuk Amar (Dr) Tommy Bugo @ Hamid Bugo, Dato’ Seri Lim Haw Kuang and Mr Sreesanthan Eliathamby. All three directors were first appointed to the Board on 26 August 2010. At the same time, Tan Sri Sheng Len Tao was also re-elected to the Board.

At the AGM, Musa also announced the resignation of Raja Tan Sri Dato’ Seri Arshad Raja Tun Uda from the Board of Sime Darby. Raja Arshad was appointed to the Board on 14 September 2007. He was chairman of the Board Audit Committee and a member of the Board Risk Committee.

Six members of the Board of Directors did not seek reelection at the AGM. They are: Deputy Chairman, Tun Ahmad Sarji Abdul Hamid, 72, Dr Arifin Mohamad Siregar, 76, Tan Sri Datuk Dr Ahmad Tajuddin Ali, 62, Dato’ Seri Mohamed Sulaiman, 72, Dato’ Dr Abdul Halim Ismail, 71 and Datin Paduka Zaitoon Dato’ Othman, 70.

There were five new appointments to the Board of Directors, namely Tan Sri Dato’ Sri Hamad Kama Piah Che Othman, Tan Sri Datuk Dr Yusof Basiran, Puan Zaiton Mohd Hassan, Encik Azmi Mohd Ali and Dato’ Mohd Bakke Salleh, who was appointed Executive Director.

Musa offered a note of appreciation for the distinguished services of the retiring and resigning directors and welcomed the new members of the Board.

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