Sime Darby Company Performance

Sime Darby Company Performance

Introduction

The name of the company discussed here is the The Sime Darby Berhad. This is one of the largest listed Malaysian based company. Sime Darby has links with government organization and their majorities shareholders are state investment arm the Permodalan Nasional Berhad. The business of this company consists of property, plantation, motors, industries, health care and energy utilities. The world leading organization has announced its hundredth anniversary when the company was involved in the controversy of losses about RM of 2.1 billion last year in May. The market was in shock when this news comes out because Sime Darby Berhad was among one of the largest organization deals in 5 different sectors and the total turnover of the company is 33 billion. The company takes the action and dismisses the CEO Ahmad Zubir Murshid after the scandal of cost over runs in 4 different projects which includes QP project (the Qatar Petroleum project), Hydroelectric dam project of Bakun, the project of marine and (MOQ) the Merck Oil Qatar. It is a government linked organization and has shares in the market.

Corporate Governance

According to the company's annual report of the year 2009 the company contains thirteen boards of directors. The board of the company increases the members in the year 2007. The company promoted the director from independent non executive to the post of senior independent non executive in the year 2008.

The major role of the board of directors of the company is to set targets and the goals of the company. The board of directors also has the authorities of monitor the performance of management team and rights and power to dismiss the whole team of management if their performances are not going according to the standards. The yearly report is compiled by the chartered accountants of Price Water Coopers and the auditors. Because of the experience of the Price Waterhouse Coopers, there is no doubt about the reporting of the performance and the accuracy. The yearly report consists of brief information about every management member along with the profile of the directors. Sime Darby announced to build a new technical force which investigates the case of hydroelectric project. Sime Darby's utilities and energy operation division had planned of investment on Bakun Hydro electric dam and the project in Qatar. The investment on the project during the period of recession was of almost RM One billion. The company Sime Darby will deliver the entire related discovery after the complete investigation. The company warned the chief executive to resign from the company after the confirmation of book losses of about one billion.

According to regional research analyst Ivy Ng of CIMB “Sime Darby will miss the target performance and there are some financial issues which can affect the performance of the company in last six months of the year”. The company is facing the loss of its four projects and it is a big disaster for the company which includes MOQ (Maersk Oil Qatar) project, ...