Surely, never in the history of a public limited company has such a nonsense display of indecision and incompetence been offered to shareholders as what has gone on at CMSB the past few days.
Share prices have plummeted over 20% over the past week and if the company wasn’t largely owned by a single family and a bunch of government linked pension funds the situation would be far worse. Consider how shares halved after GE14 when sellers assumed the company would be target number one for incoming anti-corruption reformers (luckily for them Godfather Taib Mahmud did a deal with Dr M, and the prices bounced back up).
The Board of Directors have popped in and out like figures in a Swiss clock in past days, announcing first one thing and then almost immediately retracting it with something else. On April 22nd it was learnt that the deputy chairman, Abu Bekir Mahmud (Governor Taib’s son), had been asked to step aside along with his apparent collaborator, communications director Karl Vink, pending investigations into conflicts of interest.
Then, several days of bemusement later, details started to be released about the apparent circumstances behind those moves, to which the board had allegedly been alerted thanks to whistleblowing that had taken place through the firm’s procedures.
The issue related, as an earlier report on this site had suspected it might, to the activities of the CMS subsidiary CMS I-Systems Sdn Bhd controlled by Abu Bekir and into which he had apparently channelled large sums. Specifically, the complaint had referred to the hiring of a company named Vienna Advantage (in which both Vink and Mahmud had ownership interests) to update group software systems. The fees agreed were apparently extortionate, hence the allegations of conflict of interest.
The backdrop to such tale-telling against the company’s powerful director (playboy Abu Bekir might have sold off his CMSB shares but as the son of the Governor he expected to continue to call the shots) is known to have been a family fall out of immense proportions.
Abu Bekir had previously got rid of his management focused brother-in-law Alwee Alsree, the former Group Executive Director, following a disagreement primarily over Abu Bekir’s investments in this very same subsidiary CMS I-Systems.
Seeking to present a veneer of due process and control over the situation, CMSB press releases at the time of this shocking development stated that Abu Bekir had agreed to step aside pending an independent investigation ordered by the company into the whole affair. Abu Bekir had also issued a statement saying that he was happy to do so and to allow the investigation to take its course.
But by Wednesday there was a shocking escalation of the situation with a brief announcement by the company to the Stock Exchange that the Group Chief Financial Officer had also suddenly been suspended from his post “to facilitate investigations into allegations of possible financial mismanagement”.
Was the entire company being run by crooks, shareholders were entitled to be asking themselves? Many Sarawakians have of course always been of that view, given the conglomerate largely represents the looting and accretion of state assets by the Governor and his family.
So, what was going on? On Thursday things perhaps became a little clearer with the issuing of yet another statement by the Board, this time signalling a total reversal of all its previous moves and decisions.
It appears from this most recent statement that Board Members have now discovered that the whistleblower complaint was wholly unfounded; that the villain of the piece was in fact the CFO and that therefore the Board has grovelingly invited Abu Bekir to return to his position as Deputy Chairman, just a fortnight after being asked to step aside: fully exonerated of course. Equal exoneration for Mr Vink:
“The Board of Directors of Cahya Mata Sarawak Berhad (“CMS” or “the Group”) has passed a resolution requesting Deputy Group Chairman Dato Sri Mahmud Abu Bekir Taib to continue his service with the Group and not to take leave of absence as announced on Thursday April 22, 2021.
Dato Sri Mahmud had on April 22 tendered his request for leave of absence in relation to reports lodged with the relevant authorities following whistle-blower allegations.
While the Board is grateful for his gesture of seeking leave of absence, we have reviewed the situation and resolved that there is no need for him to do so.
Dato Sri Mahmud has agreed to the Board’s request and we have informed the authorities accordingly.
The Board also wishes to announce that the Board is completely satisfied that the allegations of conflict of interest made against Dato Sri Mahmud and Karl Vink, former CMS chief information officer, in relation to the award of the contract by CMS I-Systems Sdn Bhd, a wholly owned subsidiary of CMS, to Vienna Advantage GmbH are without any basis whatsoever.
The fact that the statement acknowledges that there was indeed an award of a contract to Vienna Advantage seems strange, because it confirms conflict of interest on the information that Abu Bekir and Karl Vink have ownership interests in that company!
To what, therefore, does this extraordinary climbdown owe?
Sarawak Report has received intelligence from insiders who believe they may have some answers. Namely that Abu Bekir was not as content to leave his post as he had publicly suggested and had instead turned to the board member who had been placed in charge of the new ‘Integrity Committee’ tasked with setting up the company’s ‘independent inquiry’ into the matter, the ex-property developer Yam Kong Choy (appointed 2015).
It appears that Yam has concluded in a flash there was no wrongdoing arising from the whistleblower complaint after all and has brought the rest of the board along with him.
Intriguingly, this has all of course been revealed in ADVANCE of the deliberations of an independent external investigator that the Integrity Committee announced only today that it will be appointing to look into the whole affair!
Cahya Mata Sarawak Bhd (CMS) expects to appoint an external consultant by the middle of this month to probe allegations of financial mismanagement in relation to its investments and operations…..
“The more important task of the external consultant is to review whether there were sufficient effective controls and risk mitigation measures in place to ensure that there are no future recurrences,” it said.
CMS said the concerns have been expressed to the board on substantial investment and contract losses which have been accounted for and reported in its audited financial statements for 2016, 2017, 2019 and 2020.
Yesterday, CMS announced the suspension of its group chief financial officer (CFO), Syed Hizam Alsagoff, with immediate effect for 30 days. [Borneo Post]
The strong impression given by this latest statement, surely, is that the independent investigator will be expected to put the blame for all these losses not on Abu Bekir’s spending on companies he owns, but on the CFO!
If so, the CFO may follow the path of dozens of other ‘pro-Alsree’ executives who have already been forced from their posts following the departure of Alsree in 2019.
However, there is understandably sympathy from Mr Yam for the predicament of Abu Bekir and those accusations of conflicts of interest, quite apart from the natural deference expected towards the son of the Godfather of Sarawak.
After all, only just recently a very nice position appears to have been found at the public listed company for his favourite son in law, who used to work for Mr Yam in his earlier private business. Shaun Mok Check Wei was appointed last December as CMSB’s Group Chief Operating Officer.
It would not do for the pot to be calling the kettle black in the matter of nepotism and patronage in an exposed position such as this. Although shareholders, at least those few who have purchased independent shares, appear to feel differently about the whole affair, which possibly explains the plunge in value of the past days.