The true story of Sime Darby

Source:http://www.btimes.com.my/

By Dr Chan Chin Cheung

POOR Datuk Seri Ahmad Zubir Murshid, I sympathise with his present predicament. He was not the first executive of Sime Darby Bhd to be mired in circumstances which went beyond his control - the force of historical circumstances which dated back to November 1976.

All these began on January 2 1972 when I proposed to a high government official that Malaysia would be well-placed to have a conglomerate of its own at the inception of the New Economic Policy (NEP) conceptualised by the team led by the Father of Development, Tun Abdul Razak, a statesman.

At that point, I had not the faintest idea what it was all about. All I knew was that my Malay contemporaries were very keen to do business. They grew up with me in the environs of higher education in the UK in the 1950s. We were all fired up with the things we could do in a socio-economic way. Eventually, we all returned and I by force of circumstances became a planter. Then, I could see my Malay friends were quite poor compared with myself. Also, I realised the British dominated the banking, the plantation and tin mining sectors because the biggest rubber estate owned by a Chinese then, was only 7,000 acres and the non-Malays from the urban areas did all the menial business and the hard and unrewarding work at the leading edge of the nascent 'independent' Malaysian economy.

The change came with the NEP, which promised to give all Malaysians a new beginning. I thought without a huge business entity controlled by the Malays with the co-operation of the non-Malays, we, the Malaysians, would be mired in unhealthy competition socio-economically among ourselves, which would lead to self-destruction because 70 per cent of the Malaysian economy at that point was still controlled by the British, not the Chinese. We would be getting at each other's throats for third class assets. Without Sime Darby which eventually became the flagship of Permodalan Nasional Bhd, non-Malay billionaires, some of them foreigners, would not be created during the NEP period. Hence, I proposed that a Malaysian owned and managed conglomerate should be established or acquired.

By chance in October 1973, Sime Darby was involved in its first scandal concerning its chief executive and Pernas Securities moved in with the tacit support of the Minister of Finance and the Prime Minister who both had this great foresight to do what was best for Malaysia on free market terms. This was their finest hour to agree to take-over a British conglomerate at fair market prices. Arising from this proposal, Tan Sri Taib Andak, the chairman of Maybank and myself were appointed as non-executive directors of London-based Sime Darby plc in October 1974.

But, at that time, there was not much money available for the Bumiputeras. Without informing anyone, I managed to garner the support of important investors residing in a neighbouring country who entered the fray and helped us to win against all odds by November 1976. During this period the British were at their weakest being beset with political turmoil, by the weak pound and a disinterested City in ex-colonial assets. Malaysian control was achieved with a few million ringgits, about RM23 million.

Unfortunately, at the crucial moment, Prime Minister Tun Abdul Razak passed away. Then, my view was who pays the piper calls the tune. In other words, Malaysians should be put immediately in place to steer this great ship with a purpose what some national sovereign funds only set out to do in the 21st century. But from this point onwards, no one asked me for my views and this was the theme of the executive management to the day I was asked to resign 18 years later by the executives who benefited from my concept. It was all fine and dandy if there were no financial mishaps. The executive management reigned supreme over the Board to this day. This anomaly must now be rectified in the interests of the shareholders. This is not ethical and more.

The management was not Malaysianised until 1982. By 1982, the best assets of Sime were sold in haste e.g:

1. The beverages firm Shaw Wallace of India, an Indian monopoly, with the valuable Assam frontier tea-estates. It is believed the son of the purchaser became a billionaire of India and owns the Kingfisher Airline.

2. The two Orchard Towers, Singapore which are still standing even though the management urgently advised with photos that these would collapse any moment and had to be sold back to the contractor for S$23 million quickly.

3. The Amoy Canning land in Hong Kong, which Sime tried to auction off but failed due to the fact that only the Hong Kong government auction-off lands to balance its books. Eventually, a joint venture was formed with a member of the property syndicate operating there. This property became the MRT terminus !

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