Tanjung Offshore suspends three key officials

PETALING JAYA: Tanjung Offshore Bhd has suspended three company officials on the recommendation of its newly-set up independent committee amid speculation of a boardroom tussle.

The company said that following an internal review, Tan Sri Tan Kean Soon and Muhammad Sabri Ab Ghani had been suspended from their executive functions and roles with immediate effect. They remain directors of the company.

Tan, a non-independent director, is a paid adviser of Tanjung Offshore, while Sabri is executive director.

Tan is also a substantial shareholder of Tanjung Offshore with about 6% interest based on exchange filings, while the single largest shareholder is Lembaga Tabung Haji, with a 7.99% stake.

The service of former managing director Datuk Harzani Azmi, who is a paid adviser to the company, has also been suspended with immediate effect. The company said that Harzani’s earlier nomination to be appointed to the board shall not be considered.

“The company will hold further investigations into the findings of the committee, which included several instances of possible conflicts of interest and breach of fiduciary duty by Tan and Sabri, both individually and together, and possible breaches of procedure and limits of authority by Harzani, among other matters,” Tanjung Offshore said in a statement.

The latest development confirms a StarBiz report on Jan 15 that stated a boardroom battle was brewing in Tanjong Offshore. Then, it was reported that several directors were at odds on matters related to its operations. A decision to re-appoint Harzani was also deferred until the committee conducted its investigations on the issues pertaining to Tanjong Offshore’s operations.

Tan when contacted told StarBiz that he had doubts on the neutrality of the committee as there were no substantiated claims to support its findings. “The accusations are baseless and the findings (by the committee) were not deliberated at all,” said Tan.

He also alleged that there were no proper procedures conducted before Sabri’s suspension. “He was suspended instantly without a domestic inquiry,” said Tan.

Harzani when contacted declined to comment and said he would wait for the results of the committee while Sabri said he would seek legal advice on his next move.

According to the statement, the committee was formed on Jan 8 to conduct an internal review following speculative media articles and purported complaints to the authorities against the company. It said the committee presented its findings and recommendations to the board yesterday, which was accepted by a majority of board members.

The members of the committee comprise George William Warren Jr, who is chairman, Datuk Ab Wahab Ibrahim and Shahrizal Hisham Abdul Halim.

“The possible conflicts of interest and breaches of fiduciary duty may have resulted in, among others, loss of business opportunity and potential income stream related to the Bourbon deal,” it said.

In December, a proposed asset injection by Singapore-based Bourbon Offshore Asia Pacific Ltd was mutually terminated, following changes in prevailing economic, financial and market conditions as a result of a sharp decline in oil prices. Bourbon Offshore Asia Pacific is a unit of Paris-based oil and gas (O&G) giant Bourbon SA.

The company said that these possible conflicts and breaches might have resulted in disadvantageous and lopsided terms for a contract under negotiation, and potential future loss related to a Construction Work Request (CWR) project worth about RM250mil.

In a filing with Bursa Malaysia, it said the committee found the treatment of Tanjung Offshore’s acquisition of its property in Birmingham, UK, was proper and had complied with Bursa Malaysia’s listing rules.

It also found that the company’s acquisition of the remaining 49% in Gas Generators (M) Sdn Bhd (Gastec) was proper, fair and reasonable. This followed a valuation by an independent external auditor engaged by the committee, which placed the historical enterprise value at the time of acquisition at between RM66.42mil to RM71.24mil.

The company said the board would seek legal advice on its next course of action and would make the appropriate reports to the authorities in due time.