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Alleged conflict of interest involving Shell Malaysia E&P manager

Dear Alfred and John,

Grateful if you can follow up on my complaint against Shell Malaysia employee Surya Hidayat Abdul Malik (contracting and procurement country manager, Shell Malaysia E&P).

For your info, Petra Perdana and Petra Energy are both contractors of Sarawak and Sabah Shell in Malaysia.

Thank you.

J Voon
E-mail Address:
[email protected]

Your Question:

Please check any conflict of interest of Shell malaysia employee Surya Hidayat Abdul Malik (contracting and procurement country manager, Shell Malaysia E&P).

See article below :

The Star Online

Tuesday January 19, 2010

SC gets complaint over Petra case


Two groups see three major incidents differently

PETALING JAYA: The Securities Commission (SC) is looking into the submission of Petra Perdana Bhd executive director Shamsul Saad, purportedly relating to “breaches in procedures’’ over the sale of a block of Petra Energy Bhd shares belonging to Petra Perdana and also the sale of vessels by Petra Perdana to Petra Energy.

“The SC has received a complaint relating to Petra Perdana. As in the case of any complaints that we receive, the complaint is being reviewed. We are currently not in a position to comment further,’’ an SC spokesman said in response to queries by StarBiz.

Shamsul told StarBiz: “I have put in my submission to the SC.’’

The complaint comes in the wake of three major incidents that mark the totally divergent views of two groups of Petra Perdana shareholders – one led by executive chairman and CEO Tengku Datuk Ibrahim Petra Tengku Indra Petra and the other by Shamsul, and brothers Datuk Henry Kho Poh Eng and Koh Pho Wat, both senior general managers of Petra Perdana.

On Jan 8, Ibrahim exercised his executive powers to temporarily suspend all the senior management and key personnel, all of whom are the shareholders who had requisitioned for an EGM on Feb 4 to remove four directors – Ibrahim, his wife Datin Nariza Hajjar Hashim, Wong Fook Heng and Tiong Young Kong.

The requisitioners comprise Shamsul, Poh Eng, Pho Wat, Abu Samah Ahmad, Abd Razak Abd Aziz, Edwin Lim Kuok Sim, Teo Swee Hong, David Kwek Peng Loon, Christopher Then Ted Loong, Wong Mun Nyen and Soon Fook Kian.

They have nominated Poh Eng, Pho Wat (who is also executive director of Petra Marine Offshore Pte Ltd, Intra Oil Services Bhd, and Ampangship Marine Services Sdn Bhd together with Shamsul); Surya Hidayat Abdul Malik (contracting and procurement country manager, Shell Malaysia E&P) and chartered accountant Ganesan Sundaraj (director of Analabs Resources Bhd and other companies).

On Dec 23, Shamsul obtained an injunction, which has been extended to March 3, to stop the sale of the remaining 29.59% in Petra Energy, following an earlier sale of 25.03% or 48.8 million shares to Shorefield Resources Sdn Bhd for RM1.91 per share.

The divestment on piecemeal basis did not go down well with some of the shareholders.

Shamsul contended: “The conditions set by the board were not met, namely, that the sale should be conducted en bloc and on an open tender basis. The en bloc condition inherently already requires shareholder approval in an EGM. To execute this share sale piecemeal without reverting to the board undermines the requirements for shareholder approval.”

To which Ibrahim, at a press briefing last week, said in a statement that advice from the placement agent and investment bank indicated that a sale by open tender and on an en bloc basis was not practical in the prevailing market environment.

“Through a tender by invitation, six reputable companies were invited,’’ Ibrahim said. “Four did not revert and one withdrew. Shorefield offered RM1.91, which was at a premium to the prevailing market price, for 25%.’’

According to Ibrahim, the board had set a minimum pricing of RM1.80 net for the shares, for which the valuation showed a range of RM1.63 to RM1.90.

“Why is he in such a hurry to sell the stake?’’ questioned Shamsul. “All the proceeds raised from these piecemeal disposals cannot be used for working capital, or to take delivery of new vessels, or to allay any immediate cashflow constraint. The proceeds are still sitting in an escrow account and waiting to pre-pay the loan that is only due in 2012 and 2013.’’

Ibrahim had earlier explained that separate projections for the marine business over the next 12 months showed a cashflow deficit of RM40mil–RM70mil, while utilisation and charter rates remained low.

To this, Shamsul said: “The simulations were prepared based on the parameters set by the board for the 12 months ending Dec 31, 2010, on a very conservative to worst-case scenario.

“However, it should be noted that in spite of all the negative comments on the marine business, the results to date for the third quarter 2009, showed that the profit from the marine business was, in fact, the one that is propping up the group.”

The sale of three vessels by Petra Perdana to Petra Energy also represented a bone of contention.

Shamsul maintained: “It would be better to lease the vessels. That would have generated cashflow and profits for Petra Perdana especially during a downturn that in the fourth quarter of 2008 had already hit the business. At the same time, Petra Energy would still have the vessels chartered to it at competitive rates.’’

Ibrahim said in his statement that the company had difficulties in obtaining financing for those vessels at the time, and for several other new vessels to be delivered.

Each of the two opposing parties is estimated to collectively own 12%–15% of Petra Perdana; Lembaga Tabung Haji and Permodalan Nasional Bhd (16%) and Amanah Saham Wawasan 2020 (7.6%).

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