Sime Darby president and group chief executive (GEC) Ahmad Zubir Murshid has been asked to go on a leave of absence with immediate effect by the plantation giant's board of directors, prior to the expiry of his contract on Nov 26.

NONE The board cited concerns with regard to the management and internal controls of the group.

In particular, the board focused on the Bakun hydroelectric dam project, which due to various factors, has seen completion being delayed and costs escalating. 

Management estimates that there could be a potential additional cost attributable to the group in the FY2010 results of RM450 million.

"As a result of the above, the Group estimates there will be a negative impact of RM964 million on its results for the second half of this year," said the board in the statement.

PM: It's all about good governance

In an immediate reaction, Prime Minister Najib Razak said Sime Darby's action was in line with the principle of good governance.

"I cannot comment much. I can only comment on the principle.

"The roles of the board of directors and the management are very clear and whatever action taken by Sime Darby reflects that they need to make a firm and decisive as well as transparent decision.

"So the move by the Sime Darby board of directors is in line with the principle of good governance," he told a press conference called to announce the country's first quarter economic growth figure here today.

Najib said all government-linked companies were responsible over their own performance and the government had already underlined the principle of good governance.

"We have no intention to hide the loss or weakness that has occurred. This goes against the principle of good governance," he said.