Sime Darby is taking legal action against those believed to be involved in the severe losses in its energy and utilities division, and expects to commence the civil suit before the end of the year.

NONE According to chairperson Musa Hitam, the individuals were identified with alleged prima facie culpability by advisers, based on the forensic audit report submitted on Sept 14.

The report was considered by the board of directors on Sept 20 and has since been submitted to the Malaysian Anti-Corruption Commission (MACC) and the Securities Commission, both of which have commenced investigations.

"It is because of these on-going investigations that we are unable at this time, as advised by legal counsel, to make the findings...known to you,” he said.

The statement was distributed to reporters waiting for the conclusion of the annual general meeting, which began at 10.30am is expected to end an hour later than scheduled.

The century-old government-linked company recorded an operating loss of RM1.7 billion in its energy and utilities division in 2010 after making additional provisions of RM777.3 million for the fourth quarter, ending June 30.

The overall provisions made in the financial year 2010 amounted to a whopping RM2.1 billion.

Its net profit of RM726 million for 2010 is a far cry from the RM2.3 billion the previous year.

The MACC has begun a preliminary probe prior to the release of the forensic audit.

'Suit to try recover as much of the losses as possible'

Addressing the media after a four-and-half-hour-long annual general meeting, acting CEO Mohd Bakke Salleh refused to divulge any further information on the civil suit.

Asked if the individuals named in the forensic audit include CEO Ahmad Zubir Murshid, who has been asked to go on leave, he said: "I cannot comment because it has legal implications. You don't want to see me having to sell my house due to legal wrangling, do you?"

He would also not say how many people were named in the forensic audit, nor the nature of the suit, which he said is intended to recover as much as possible of the losses incurred due to "mismanagement and misdeeds".

"Next month (when the suit is filed) is just around the corner. You have waited for three to four months now, so another month will not be not too taxing," said Bakke, who will officially take over from Ahmad Zubir when the latter's contract ends on Nov 26.

Bakke said the alarming losses in the energy and utilities division of the Sime Darby group was a point of contention for the shareholders, and the most of the lengthy AGM was devoted to it.

"We provided explanations and gave them reasons, and at the end the shareholders appeared happy  (although) quite a number left before (the AGM ended at 3.30pm)," he said.

Audit committee chairperson opts to resign

Bakke added that six members of the board of directors chose not to stand for re-election, including deputy chairperson Ahmad Sarji Abdul Hamid, for personal reasons including age, as most of them are above 70.

The chairperson of the audit committee, Raja Arshad Raja Uda, also opted to resign, although it is unclear if the committee had anything to do with the losses.

"He decided to call it a day. I never asked why, it could be a personal thing. All good things must come to an end," Bakke said.

The group will be announcing its results for the quarter ending Sept 30, 2010, on Nov 25, after this information is revealed to Bursa Malaysia.

"Thank God (the results) are in the positive territory," he said.

On Nov 25, the group will also table a paper to the board of directors to moot a structure to turn each division of the conglomerate into a company on its own, with 30 percent of each company's board of directors being individuals independent of the Sime Darby group.