Just wandering around the net and stumbled upon this.
Full article can read below. Credits to the original author.
Sime Darby Engineering (SDE) use to make an average of ten percent on their gross profit, it was in fact more than 10%, but it’s hidden somewhere thru their accounting process for obvious reasons. For a turnover of RM400 million, they would easily paid more than RM40 million on taxes alone. That was the time of Dr. Samad Solbai and his team.
This day, SDE profit has plunged to a mere 3% out of a turnover of RM2 billion. SDE accountants are doing the direct opposite: how to show more profits, hide the losses and mitigate further losses. This is the time of Dato’ Shukri, Kadir Alias and a man whose name does not appear anywhere in SDE or even in the company that he represents.
The picture is less than rosy, especially in light of the financial crisis and the current price of oil. Aziz Dawi, from SDE, presented to Minister Of Finance (MOF) and a team of Petronas members, the status of SDE in the next few years after the Kumang Cluster (RM1.8 billion) and the Maersk Oil Qatar (MOQ) project is completed. He is worried of course for his new position and the faith of more than 1000 permanent staff of SDE. The irony of this is what while the meeting is important in charting SDE future. The actual faith of SDE is being decided somewhere outside Malaysia. In Qatar, where the Prime Minister is due to visit with some high level top notch of Sime Darby and especially SDE. The focus is on the Qatar Petroleum (QP)project. Awarded to SDE at a figure close to RM1 billion now it’s facing massive delay and losses to the tune of RM700 million. All earlier reports have missed the name of Qatar Petroleum (QP) against Maersk Oil Qatar (MAQ) as a result of which Sime Darby immediately denied the losses. In the clarification, Sime Darby is right in doing that, because the name of the project is not Maersk Oil Qatar (MOQ) but Qatar Petroleum (QP).
When the project was awarded about a year ago, the sense of euphoria and jubilation was without any end. All other local projects was sideline and take secondary stage. Further jubilation was when MOQ was awarded at a price tag of RM2 billion and the first payment was made to SDE. The cash flow was all positive and blue. Six (6) month Bonus was given to all SDE staff for last year 2008. Not until lately, the mention of QP and MOQ can only be done in secrecy and in very small circle. The QP project is already delayed contractually over a year. There will be losses and penalty but hope is that SDE fulfilled their contract and move on with other new project. No one have a clear clue of the losses and how to manage the project from suffering further losses. The current SDE team in Johor and in Qatar does not have the contractual expertise nor the engineering experience to manage the problem of QP. MOQ problem, is in the procurement with almost RM200 million loss, but yet again the fabrication works will be delayed and extend to offshore. Both Sime Darby and SDE is in state of denial of the problem they are facing. The problem is left to be managed by the General Manager, Mr. Zaki Osman, who frequent traveling up and down of Qatar from Johor Bahru is like his ordinary daily trip from Johor Bahru to Kuala Lumpur. Still keeping his cool, although mentally exhausted when re reaches Johor Bahru, the strain and crack is beginning to shows. He is no superman. The problem is not entirely his doing or his project management team. The main cause of the problem is the relationship SDE have with a company called Real Offshore Installation Co. Sdn. Bhd (ROIC) and the deal marker of the Qatar project a man who will be identified as Mr.Sim.
Kadir Alias (SDE head of oil and gas division) met Mr. Sim when they were in Brook Dockyard in Kuching. Kadir was with Petronas at this time. Mr. Sim was assisting Brookes Dockyard based on commission and project success. He prepared all the bids submission and take a mark up from the project -3%-a small amount – and supply all the labor and sub contractors. The project was small and Petronas is a better client to manage. Mr. Sim was introduced to Dato’ Shukri as the man who put the Qatar deal together. That was the beginning of the “Simetyam Affairs’ – The then GM of SDE at that time was Ahmad Faiza, was politely terminated from his GM office and Mr. Zaki was brought in as General Manager. Not so long after come in Mr. Eric (also from Brookes Dockyard) as the Procurement Manager of SDE.
Mr. Sim operates and owned another outfit called Intraline – a full bumiputra company with Petronas license. His name does not appear in any of the statutory forms 24 or 29. The list of licenses that the company registered in Petronas is athick as a government annual gazette. The faceless but likeable personality move in and out of SDE, Qatar and of course Petronas smoothly, seamlessly and easily with confidents as if he owns them. Despite all the losses and delay suffered by SDE for both QP and MOQ, it is no doubt that the person who benefit the most is Mr. Sim thru commission as well as thru ROIC. This will be denied by SDE and Sime Darby but will be put in lightly by a forensic accountant of PNB.
Is SDE for SALE…? That was the plan, an exit strategy by Mr. Hisham Hamdan, the main man for IJN privatization and Labu Airport. An exec VP Corporate Planning, he is closely link with Kadir Alias. Unfortunately with dwindling profit margin and the financial crisis the exist strategy will have to wait a little longer. There is nowhere to hide the losses of both QP and MOQ other than thru getting new project from Petronas. This is where Kumang Cluster comes in as a “GIFT”. At RM 1.8 billion the “CostPlus” project is a bonus and timely rescue to cover the losses from QP and possibly MOQ. Industry sources agree that is possible with the help of well connected people within Petronas and of course Mr. Sim. At that price, Malaysia Marine and Heavy Engineering (MMHE) have to fabricate 2 platforms for Petronas; Tangga Barat and Kinabalu, TWO for the price of ONE. MMHE smell foul but respected Petronas decisions. SDE further proof their strength and capability by completing 90% of the purchases within days of the signing of the contract. While they struggle in bitter regrets in Qatar the outshine in Kumang Cluster. Mr. Sim and his team organized the public relations to ensure that all is in order with Petronas in as far as SDE is concerned. Cost Plus project is the easiest way to make money – from suppliers to engineers – even where it is lump sum – the margin is in a good margin – Petronas must have been hook wind into this.
The magical illusion remains for as long as there is project – this is where Aziz Dawi in to show to Minister Of Finance (MOF) and Petronas that they need more projects. Especially like that of Kumang – with cost plus. They cannot afford to have a gap in the works. Partly because of the number of staff that carry with all about average pay slip but more importantly to ensure that the losses will not appears in the account of 2010. The place of Sime Darby as an institution of wealth lay between economics and politics. Bernard Esambert , former Rothschild banker, stated: “it is the junction of the state apparatus and the private sector that the possibility of making money are the greatest”. The holding company, Sime Darby, the subsidiary company Sime Darby Engineering had evolved an internal system of both behavior and social connection. There was a code of conduct, social conduct, in business affairs and web of connectedness, not merely on marriage but also on “honor among thief”.
Zamri from SDE is related to the Group Chief Executive Dato’ Seri Ahmad Zubir Mursyid. Kadir through Hisham Hamdan. Further down the line another character appears as Mr. Salam from Duplex who claim close ties with the current Prime Minister, PM ‘Flip-Flop’ Dato’ Seri Abdullah Ahmad Badawi. Mr. Salam is now the new link between Mr. Sim, Kadir and Zamri. It is obvious to see that the next fall guy will be Mr. Zaki. Especially since QP and MOQ is handled by him, it is also not difficult to find a replacement at this point in time.
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