Musa Hitam, 21 other directors now in Sime lawsuit

By Lee Wei Lian, The Malaysian Insider

KUALA LUMPUR, March 19 — Former Sime Darby chief executive Datuk Seri Ahmad Zubir Murshid is looking to take along ex-deputy prime minister Tun Musa Hitam and PNB chief Tun Ahmad Sarji Abdul Hamid among others if he is found guilty of breach of trust by his ex-employers.

In court papers obtained by The Malaysian Insider, Zubir alleged that former chairman Musa, Ahmad Sarji and 20 other former and current directors, were also liable for claims made by Sime Darby in an ongoing RM92.2 million lawsuit to recover losses incurred during the construction of the Bakun Dam, as they were members of the conglomerate’s highest decision making body.

The third party notice issued by Zubir’s lawyers said that if Sime Darby is successful in establishing its claims against Zubir, the latter will claim from the chairman and the directors “an indemnity and/or a contribution” against the claims and costs.

The move to name the directors in third party notice has sent shivers down spine of many of those on the board, who now caught between the rock and hard place over the decisions they made before and after the conglomerate merged with two other companies.

The local stock market will not accept that all these eminent individuals including two former chief secretaries to government, accountants and others had no knowledge of the cost overruns in the Bakun Dam and oil and gas projects in Qatar, especially since some of them chaired supervisory committees, risk and audit committees.

The notice also stated that the grounds for its claims “are that at all times material to this action you were a member of one of more of the Board of Directors of the Plaintiffs herein representing the highest decision making bodies of the Plaintiffs and as such you owed a duty to exercise due skill, care and diligence in the exercise of your duties”.

Sime Darby officials confirmed the suit when contacted by The Malaysian Insider.

Zubir’s statement of defence to a separate RM338 million lawsuit filed by Sime Darby which was also read by The Malaysian Insider sheds light on the inner workings of the group, and answers some questions posed by the market and Malaysians who wondered why no board member has been held to account for the RM2.1 billion worth of losses incurred in the last financial year.

The former Sime Darby chief accused the group of selective prosecution, pointing out in the statement of defence that the main board of directors “retained control over the management and ultimate decision-making process of the Sime Group”.

He further claimed that the supervisory committee — comprising the president, group chief executive and main board members — was always chaired by a board member other than the president and group chief executive.

The legal battle could affect sentiment toward Sime Darby as investors are looking for positive news flow from the group following the installation of new management after Zubir’s departure.

Sime Darby’s wholly owned subsidiary Sime Darby Engineering was also slapped with a USD178 million (RM543 million) lawsuit this past week by Abu Dhabi based Emirates International Energy Services (EMAS) for alleged non-participation in projects that EMAS had identified.

Besides Musa and Ahmad Sarji, other directors names in the third party notice include National Economic Advisory Council member Datuk Seri Panglima Shen Leng Tao and Khazanah director Raja Tan Sri Datuk Seri Arshad Raja Tun Uda.

Top former and current public officials are also expected to be involved in a major exercise of washing dirty linen during the court case.

Sources told The Malaysian Insider that among other matters to be disclosed in the suit is the extent of involvement by government leaders, the Cabinet and senior politicians in the running of the public-listed company.