Monday, September 20, 2010

Sime Darby: Audit Of Energy Arm Finds Breach Of Duty,

Sime Darby Bhd. said Monday that its investigations into losses amounting to MYR1.3 billion at its energy and utilities arm have found "breaches of duties and obligations and inappropriate conduct."

The company didn't provide further details, saying it had been advised by its legal counsel to keep confidential the details of the report and the nature of the proceedings for now.

"The board has resolved to initiate legal proceedings and where appropriate, to lodge reports with the relevant authorities," the world's largest listed plantation firm by acreage said in a stock exchange filing.

In May, the state-controlled firm had asked its then president and chief executive, Ahmad Zubir Murshid, to go on a leave of absence after an internal task force revealed significant losses from cost overruns in several key energy and utility projects, including civil work for the Bakun hydroelectric dam in east Malaysia and a contract for Maersk Oil in Qatar.

The company then appointed a legal firm "to independently conduct follow-through investigations to determine culpability" for the losses at its troubled energy projects.

Accounting firm PricewaterhouseCoopers was also tasked with carrying out forensic audits on the projects in conjunction with the legal review.

An investigation by Malaysia's anti-graft agency is also ongoing, and the general manager of its unit Sime Darby Marine, Zamri Mohamed Ideruswas, was charged with corruption in August. - DOW JONES NEWSWIRE

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