Sime Darby, the biggest plantation group in Malaysia, had registered a huge amount cost overruns. Last Tuesday, Sime Darby’s president and group chief executive Ahmad Zubir Murshid was asked by the board to take a leave of absence prior to the expiry of his contract in Nov 26, 2010.
This follows the discovery of RM964 million in cost overruns from four energy and utilities projects, including the Bakun dam project, racked up by the company during his tenure.
Subsequently, Sime Darby chairman Musa Hitam said he will resign if necessary following the conglomerate’s huge losses of nearly RM1 billion for this quarter arising from cost overruns in four projects.
“Resignation is no big deal... When I have made my own assessment, if necessary. Yes, I am prepared. Needs to be sacked? Yes. Needs to be suspended? Yes. The whole board or anything,” he said in response to concerns about the board of directors’ failure in supervision.
If Musa and his board members leave, it will set a new precedent for accountability in Malaysia. Not only executives in GLCs have to be accountable for their performance, the same standards must be adopted by other professionals, politicians and policy makers too.
However, no stones should be left unturned to find out why the conglomerate had recorded such huge cost overruns. Action must be taken against any irresponsible or unscrupulous attempts to put the conglomerate under tremendous financial stress.
We want all GLCs to publish disclosures at least twice yearly to ensure that their operations are sound and well managed.
Malaysia must start to take the quality of governance and leadership seriously if it does not want to continue the slide.
For now, PM Najib has to focus on delivery and not more rhetoric. Perhaps he should sack his current batch of advisers who had made him announced so many slogans and grand policies but with little results to show.
For 1Malaysia to work, there must also adherence to world-class governance standards. Not sweeping things under the carpet and keep defending the indefensible.
Now, can we have the IPCMC?