After much fanfare and under the takeover vehicle of Synergy Drive Bhd(SD), the main plantation companies of Sime Darby, Golden Hope and Guthrie Bhd were merged and subsequently SD changed its name back to Sime Darby that was touted as the largest plantation group in the world.
In the process, CIMB Investment Bank made a few hundred million just to administer the process instead of being managed by PNB and that would have saved a few dineros for the shareholders.
So Sime Darby is once again in the news for the wrong reasons - this time the Engineering Division managed to chalk up losses that some analysts suggest will surpass RM900mil for the group.
This is what usually happens when a company that is world class in one field, in this example plantations tries to grow big in areas where it is not strong. The profits made in plantations are put at risk and the group will suffer.
Not that long ago, we also had the short-lived and ill-conceived saga of Sime Bank and you can read some details of that sorry episode here.
As a former shareholder of Golden Hope who got steam-rolled in the takeover, I am glad I sold my SD shares at RM10.
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