Dear Santa Musa
We have read your message and the facts presented. [Read the details here.]
Your supposed clarification (via Leela Barrock) had served to elaborate facts we have simplified for our readers which you deemed as erroneous with respect to the EGM resolutions and decision making process of identifying grant recipient of the Proposed Scheme.
However, we like to believe we were not to far off since two of the resolutions was about approving the scheme for Dato Bakke and Nur Tania and naturally the scheme of arrangement have to be approved first.
By describing it as "free shares", we are not that far off too because the Ordinary Resolution 1 did mentioned below:
ii) to appoint a trustee to facilitate the implementation and administration of the Proposed Scheme (“Trustee”) and authorise the Trustee to subscribe for new ordinary shares of RM0.50 each in Sime Darby (“Sime Darby Shares”) and/or acquire existing Sime Darby Shares from the market and/or transfer such Sime Darby Shares for the purpose of vesting of Scheme Shares (as defined below) pursuant to the Proposed Scheme;
(iii) to provide money or other assistance (financial or otherwise) and/or authorise and/or procure any one or more of the subsidiaries of the Company, to provide money or other assistance (financial or otherwise) from time to time if required to enable the Trustee to subscribe for new and/or acquire existing Sime Darby Shares from the market provided that the Company or any subsidiaries of the Sime Darby Group shall not provide such money or assistance (financial or otherwise) if it would be in breach of any laws of Malaysia and where the lending subsidiary.And the diagram below, described the Proposed Scheme well:
In addition, your supposed clarification did corrected misunderstanding that only two employees will be awarded such grant as per Ordinary Resolution 2 and 3 since it involves directors or one related to directors.
We now understand that it will not be limited to only the two first employees but there will be more executive director/s, various levels of management, executives and graded staff in the future. The limitation is that the Proposed Scheme of the three types of Grants will not exceed 10% of existing paid-up capital.
On this part, it is easy to be misunderstood because the only company communication to the public on this matter available is the EGM Notice issued by the Company Secretary on October 16 and it is only available on the Bursa website.
There had not been any press release by Sime Darby on this matter. See below the list of press releases by Sime Darby for 2012 to-date.
All the press releases seemed more on CSR and new business activities but none on the grant that has relevance and significance to the shareholders.
- Isn't it important that the shareholders be made known that the company will be expanding the company's capital base thus, diluting their earning and dividend return?
- Why is minimal or no press releases on matters relevant for shareholders to know on the development of their company and those bearing impact on their earnings? Such information is mostly known through newspaper, analysts report etc.
- Why is the company more readily to make available such detailed information to reporters, analysts, etc than their own shareholders?
Only The Star reporting of your denial gave coverage of the grant.
Other newspaper or media neither carried your denial which was emailed to more than 40 media personalities nor the decision of the October 8th Board of Directors meeting's decision.
It is surprising because it is of public interest and will not reflect well on the government. Rocky here had raised the issues below:
My first thought when I read Big Dog's posting was: "Ah, and the PRU13 is just around the corner!" Because they are government-linked, as their name suggests, GLCs are a favorite punching bag of the Opposition. Especially so during election season. This one on Sime Darby is going to be a big and easy target for them in the run-up to the 13th General Election.
Forget about the scheme being great for the 100,000 employees of Sime Darby. The Opposition doesn't care. Their focus will be on:
The fact that Sime Darby wishes to reward a. its CEO and b. someone related to a Director
The fact that the CEO has been around hardly long enough
The fact that Sime Darby had just exited from a very rough patch that involved millions of RM in unexplained losses and alleged mismanagement.
And the fact that those rough patches have resulted in at least a lawsuit filed by the former CEO against the Board of Directors, which is still on-going
Timing is everything. Just the other day, PAS' Mahfuz Omar raised hell in Parliament over Tabung Haji CEO Ismee Ismail's pay and perks. The guy's RM70k a month salary in 2011 has been raised to RM85k from this year. He's overpaid, Mahfuz said, comparing Tabung Haji's size to EPF's and Ismee's pay to EPF CEO's pay (RM50,000 a month). Read Mahfuz: Explain Tabung Haji CEO's pay packet.
In the run-up to PRU12 in March 2008, the pay and perks of GLC bosses became an election issue to win a war of perception that Abdullah Badawi's regime was CEOs-friendly but did not really give two hoots about the general working population and, therefore, wasn't that people-friendly. We can expect more intensified attacks in the run up to PRU13.We are still checking your claim that this scheme is similar to that of Telekom, Maybank, Axiata and etc.
Was there any scheme involving giving "free shares" (as to mean trustee subscribing or securing the shares with money from the company and the shares transferred to recipient without any money exchange)?
At the moment, to the best of our knowledge, we seriously doubt there are such "free shares" scheme but only shares option or popularly known as ESOS.
As others had calculated, the 3,000,000 shares to be allocated to Bakke could be worth between RM27-RM30 million at current prices. We have asked if Bakke is worth that much within his 2 years presence in Sime Darby. Read our argument here as follows:
It is how Bakke strategise Sime Darby from the day he joined and how the target result is achieved can he be judged. Two years is too short to say he has achieve his target. Sometimes the implementation of major strategic plan may take more than 2 years to see the performance.Santa Musa, you have not clarified.
This is disappointing because after the Qatar debacle, Sime Darby claimed here as wanting to, as follows:
- Promote integrity, transparency, accountability and responsiveness
- Ensure check and balances between Divisions and Group
- Cultivate ethical conduct behaviour through the new Code of Business Conduct
In this era of digital transparency, your stakeholders would like to see the consistency with the rationales written in the Circular to Shareholders dated October 18 page 7, below:
We know it is a tall order for former civil servant and politician like you, Santa Musa.
You are too accustomed to having the public listen and respect your decisions in the past. The reindeer in you will feel naked and gullible to be too open. But, you cannot afford to play those sneeky games of your past any more.
Since Sime Darby is a public company and it's shareholders are holders of public fund, your ultimate stakeholders is the public and voters. The Directors have NO INTEREST in the company their are responsible to but directly and/or indirectly, the public have shares in the company.
The public want this transparency and will be pissed off should they perceive Sime Darby is trying to hide something from them since the October 8th Board of Directors meeting. It creates the notion of wrongdoings, favoritism and self interest.
For those without interest in the company, the members of the Board of Directors are paid well for the job of attending meetings and supposedly taking fiduciary responsibility. They expect the Board of Directors to take care of their interests over the interest of individuals.
Some in the public find it hard to understand the need to dilute their shares through ESOS. They will find it to be more difficult to digest "their" company giving away "free shares." For all practical purposes, "their" top employees have been given good salary, benefits, perks and bonuses. Most likely, it is more than their own renumeration.
In these day and the prominence of Gen Y generation, loyalty is not part of their vocabulary and as any ESOS schemes of the past shows employees take it up and sell. Forget about shares as incentive to remain in the company.
Now that it is established that the Board of Directors do not own the company, they should communicate with the "owners."
The Notice for EGM and the Circular to Shareholders dated October 18th, 10 days after the decision made in the Board of Directors Meeting of October 8th highlighted a stark problem with corporate communication.
Such documents are not communication to the public. It is written in long-winded language which, while it is legally accurate, can easily misled and confuse the ordinary public by their legal style writing and jargons.
There is a need to be communicable because in the case of Sime Darby, 76% of their shareholders are individuals and not lawyers.
Despite having such familiarity with reading public announcement from the Bursa, we could not see any specific phrases saying there will be other beneficiary in the future other than Bakke and Nur Tania.
It was only inferred from Ordinary Resolutions 1 that since the different grants covers the various grades, there will be another recipient to ensure all three grades have recipients.
Lastly Santa Musa, about our naughty and at times nasty treatment of you, we can't avoid being the socio-political blogger we are.
In this season to be jolly, we only seek your indulgence to take it in stride to what is a normal brickbat in politics. It is pointless for us to apologise because we cannot promise to stop.
You should understand that as Johorean, we had to put up with your politics all of our adult life. So please do not burden Leela to issue a press release everytime we bitch of you politically.
We will not bother you any further for the time being, Santa Musa. We think you are busy giving away many presents.
Wouldn't it be great if those many poor estate workers are getting presents too. Schemes like this favours head office people who has a chance of giving good impression to the directors and senior management. Alas, it will only make you too busy.
Anyway, just be careful when you are coming down those chimneys. At your late age, a big fall can be more painful and embarassing than those others you made to fall in the past.
21/10/2012 10:00 PM
* Edited 23/10/2012 7:00 AM