Less than four months into a five-year term, South Korean President’s approval ratings have plunged to new lows with opposition politicians threatening to boycott Parliament. Everything started when Lee decided to remove restrictions on U.S. beef which sparked widespread protests over food safety. Mad cow disease or not, Lee was seen as too eager to please his country’s close ally U.S. hence lifted the ban on U.S. beef imports for the first time since it was re-imposed last year but backfired and opened up a crisis that could threatens a free-trade agreement (FTA) between the two countries.
All the top aides of President Lee have offered to resign to shoulder the blame for a political crisis over US beef import. If not tackled correctly, it’s a matter of time before President Lee’s turn to submit his own resignation. I suppose you can only see such honorable actions in several countries within Asia – South Korea, Japan, India and Australia to name a few. The culture of taking full responsibility by resigning is rather non-existent in country such as Malaysia especially from top corporate figures, what more from politicians. They would rather glue themselves to their comfy chairs or chain themselves to the pillars than resign to take responsibility over their mistakes.
Unless sacked, they would play dumbs. Remember the chairman of Transmile Group Berhad (KLSE: TRANMIL, stock-code 7000) who was fired but claimed he resigned voluntarily? Of course after practically wiped out, certain politicians from the National Front component parties offered to resign but retracted later (old scripts recycled). However there are bunches of expired yet greedy veteran politicians who chained themselves to the Presidents’ chair shamelessly. Anwar pledged to resign if he fails to reduce petrol price after he becomes the new Prime Minister; even if the price of crude oil went above US$200 (RM650) per barrel. Time will tell if he could deliver although he didn’t commit a specific quantum of reduction.
On the corporate side, it appears two top guns were fired – group CFO and Vice President of the world’s largest listed palm oil producer, Sime Darby Berhad (SIME: stock-code 4197). Razidan Ghazalli (group CFO) and Muhammad Mohan Kittu Abdullah (Vice President) were sacked with immediate effect after an inquiry into RM120 million ($36.78 million) of futures trading losses at
Golden Jomalina Food Industries (was then a subsidiary of Golden Hope Plantations). Razidan was Golden Hope’s finance director while Muhammad was general manager of Jomalina when the losses occurred.
The losses were discovered in August 2007, about 9-months after the Super-Merger announcement that saw the merger of Kumpulan Guthrie Berhad, Sime Darby Berhad and Golden Hope Plantations Berhad creating the biggest listed palm oil producer in the world in terms of output and market value under a new company called Synergy Drive. It’s mind-bloggling that immediate stern action was not taken after the discovery but rather after more than six-months until now. Now, the question is would Sime Darby initiate any legal charges on both of them or will both of them walk away free men? Were they allowed to trade the futures in the first place? Can someone tell me that Golden Jomalina Food Industries was in the future trading business?
In an attempt to cool the situation Sime Darby said appropriate provisions have been made and the group did not expect any impact on its future profitability. The story has not ended and now it seems rumors are circulating that Sime Darby’s plantations integration adviser, Datuk Sabri Ahmad, formerly group chief executive of Golden Hope also opted to resign from the group together with Dr Anhar Suki (Head Engineering Services) and Azmir Yahya. Looking at the top guns involved, was there any more hidden story behind this transaction besides what was reported? Were they made the scapegoats of a decision agreed collectively? No matter what RM120 million is no small amount and heads need to roll for the pleasure of investors.
Other Articles That May Interest You …
- No fees but shareholders fuming Ling Chicken Out
- Ling Liong Sik Resigned (or Fired?) from Transmile
- The Composite Index, Plantation Stocks and the Wolf
- Plantation Merger & Acquisition Heating Up
- Guthrie, Sime, Golden-Hope Shareholders Under-Offered
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June 10th, 2008 by financetwitter
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Looks like commodity bears got burnt. Those who short oil now better be careful. A retracement is likely, but they must have a phone line to Middle East and Pakistan. BTW Hurricane 2008 is approaching 🙂