Scomi

Scomi Group Berhad is a global service provider that is based in Selangor, Sabah, Malaysia and is mainly involved in oil & gas, transport engineering and marine transportation.

Scomi Group Berhad
TypePublic company
MYX: 7158
ISINMYL7158OO008
IndustryOil and Gas, Public Transportation
HeadquartersSelangor, Malaysia
Key people
Kamaluddin Abdullah, Shah Hakim Zain, Sammy Tse Kwok Fai, CEO[1]
ProductsConstruction, Manufacturing, Shipping
Revenue MYR 1 971 000 000 (2009)
MYR 9 900 000 (2009)
Number of employees
Over 9000 in 60 locations in 29 countries
SubsidiariesScomi Engineering Bhd, Scomi Rail and Scomi Energy Services Bhd which are listed on Bursa Malaysia, and PT Rig Tenders which is listed on Jakarta Stock Exchange.
Websitescomigroup.com.my

Scomi Group Bhd is listed on the main board of Bursa Malaysia Securities Berhad, and its group of companies are involved in oilfield services, public transportation and marine services. The group offers drilling fluids (DF) and related engineering services, drilling waste management (DWM) solutions, distribution of oilfield products and services, marine vessel services, machine shop services, transport engineering products involving special purpose vehicles, rail wagons, monorail vehicles and buses, supply of industrial and production chemicals and carbon dioxide (CO2) separation. The group was founded in 1961 and operates across 48 locations in 22 countries.

Activities

The company provides oilfield drilling fluids and drilling waste management services and also supplies monorail projects through its Scomi Rail subsidiary. Other companies under Scomi Group listed on Bursa Malaysia Securities Berhad are Scomi Marine Berhad and Scomi Engineering Berhad.

Other companies in the Scomi group include Scomi Oilfield Limited (Bermuda), Scomi Oiltools Limited (Bermuda), Scomi Capital Limited (Labuan), Scomi International Private Limited (Singapore), Scomi Ecosolve Limited (British Virgin Islands).

The company's subsidiaries and associate companies are involved in:

  • oilfield Services, which comprises integrated drilling fluids and drilling waste management solutions; OCTG machine shops and distribution of oilfield products and services
  • transport, which comprises rail, monorail and buses for the transportation sector and special purpose vehicles for the aviation, health, defense, commercial and rescue services
  • energy logistics, which provides marine vessels for the coal and oil and gas industry
  • production enhancement, which comprises industrial and production chemicals division; and gas business, which mainly provides gas processing equipment.

History

The Scomi Group has its roots in Subang Commercial Motor Industries (S.C.O.M.I.) incorporated in 1990.

In 2000, Scomi was acquired by Kaspadu Sdn Bhd a company controlled by Shah Hakim Zain and Kamaluddin Abdullah.[2]

When the founders of the company took over Subang Commercial Motor Industries, the main motivation for the acquisition was the coach building business. Eventually, the drilling fluids business became the main business for the group, which led to its listing on the then second board of Bursa Malaysia. In 2004, it bought a 71% stake in Oiltools International Ltd to expand its oil and gas business.

Not long after that it took over jewellery company Habib Corp Bhd, which would later become Scomi Marine, and it entered into a RM1.3bil deal to buy vessels from Chuan Hup and stakes in CH Offshore Ltd and PT Rig Tenders Indonesia. The company moved its engineering division into the listed shell corporation of Bell & Order Bhd, which later became Scomi Engineering in 2006.

In 2007, Scomi Engineering bought Mtrans, a bus and monorail operator, for RM25mil.

Scomi's major shareholder is Datuk Kamaluddin Abdullah, son of former prime minister Abdullah Ahmad Badawi.[3]

Monorail projects

Monorails form an area of increased focus for Scomi, as the company seeks to diversify its business lines.[4]

Scomi Engineering won a RM1.84 billion bid in 2008 to build a monorail project in Mumbai with its Indian partner Larsen & Toubro. Its share of that job is RM823mil and projected margins are between 10% and 20%. The Mumbai project has been a failure with the operations stopped in November 2017, due to an incidental fire in two coaches. On 14 December, MMRDA took over Monorail operations after terminating the contract with LTSE.[5]

Monorail projects involving Scomi:

Research

Typically, monorails carry fewer passengers than a LRT or MRT. Following research and development, Scomi announced a monorail with an eight-car configuration, versus the current four-car configuration for the monorail in Mumbai. This monorail can carry 1,000 passengers, the same as a six-car LRT.[7]

Scomi Engineering ploughs back some 20% of its revenue into research and development on trains. The next-generation monorails it is building is called Gen 3.0 and would be the size of a LRT wagon.

It is also evaluating the prospect of going into trains, where it can build LRTs or EMU (electrical multiple units), which is the kind of trains KTM uses for commuter service. [3]

Awards

The company was awarded the GreenTech Environment Excellence Silver Award 2009, by New Delhi's GreenTech Foundation. Scomi was declared the winner of the award under the engineering sector for raw materials consumption and products manufactured for buses and coaches which contributed to the protection of the environment and surrounding community.[8]

Scomi won the Industry Excellence Award 2008 given by the Malaysian Ministry of International Trade and Industry for its performance in exports. [9]

Controversies
Main article: Scomi Precision Engineering Nuclear Scandal

In the past, Scomi has faced US sanctions imposed on CEO Shah Hakim Zain.[10] These sanctions arose following allegations of Scomi being part of an international nuclear proliferation programme masterminded by Pakistan's Abdul Qadeer Khan.[11]

The Malaysian police announced that one of Scomi's main backers, Buhary Syed Abu Tahir, confessed to helping Dr Khan sell nuclear secrets and supplies to Iran and Libya.[12] Tahir, a Sri Lankan national, is reported to have links with international crime boss Dawood Ibrahim.[13] Tahir was detained without trial from 2006 to 2008 for allegedly being a national security risk, having been accused of fraudulently convincing a Scomi subsidiary company to produce components for centrifuges to be used in a uranium enrichment program.

Scomi has insisted that B.S.A. Tahir had misled it to believe that the parts were for the oil and gas industry. However, B.S.A. Tahir is reported to have said that Scomi's CEO, Shah Hakim Zain, and Scomi's main backer, Kamaluddin Abdullah (son of then Prime Minister Abdullah Ahmad Badawi), both knew the final destination of the products.[14] He has accused Scomi of making fraudulent declarations[15] and in 2009 he sued Shah Hakim and Kamaluddin for MYR75 million.

The Inspector General of Police in Malaysia investigated these allegations in depth, and concluded that in his report that: "The management of SCOPE were unaware that the exported components were part of certain centrifuge unit for LIBYA. The management of SCOPE considered it a legitimate business deal. To untrained eyes, such components would not raise any concern, as the components are similar to components that could be used by the 'petrol -chemical industry' and 'water treatment' and various other industries."

Investigators also found that "SCOPE obtained the semi-finished product to produce the said components from a German company Bikar Metal and this gives the impression that these items are not controlled items. In view of the foregoing, the work that was carried out on the semi-finished product is legitimate and does not give rise to suspicion." (Quotes are from Police report).[16]

See also

References
  1. "Shah Hakim resigns as Scomi Group CEO". The Star. Retrieved 16 September 2020.
  2. "The Star article: "Partners through thick and thin"". Biz.thestar.com.my. 7 August 2010. Retrieved 10 September 2010.
  3. "Scomi Group: From survival to success". Biz.thestar.com.my. 7 August 2010. Retrieved 10 September 2010.
  4. "Scomi Engineering's transformation". Biz.thestar.com.my. 22 March 2010. Retrieved 10 September 2010.
  5. "MMRDA terminates LTSE's Monorail contract, takes over operations". Business Standard. 14 December 2018.
  6. "Get On Track with Scomi (February 2010) (Full Version)". Scomirail.com.my. Retrieved 10 September 2010.
  7. "Combined Monorail Videos.wmv". YouTube. 5 September 2010. Retrieved 10 September 2010.
  8. "Scomi awarded the Greentech Environment Excellence Silver Award 2009". Business Standard. 20 January 2013.
  9. "Scomi wins excellence award". Theedgemalaysia.com. 16 March 2009. Retrieved 10 September 2010.
  10. Palazzolo, Joe (15 July 2011). "State Department Lifts Sanctions Against Malaysian Businessman". The Wall Street Journal.
  11. Powell, Bill; McGirk, Tim (14 February 2005). "The Man Who Sold the Bomb; How Pakistan's A.Q. Khan outwitted Western intelligence to build a global nuclear-smuggling ring that made the world a more dangerous place". Time Magazine.
  12. "Nuclear scandal: Man 'confesses'". CNN. 20 February 2004.
  13. SWAMI, PRAVEEN (6 October 2006). "Flawed justice". The Hindu.
  14. "Round Three: The BSA Tahir Story". Malaysia Today. 16 July 2010.
  15. "Round Six: How The ISA Was Used Against BSA Tahir To Protect The 'First Family'". Malaysia Today. 23 July 2010.
  16. "PRESS RELEASE BY INSPECTOR-GENERAL OF POLICE IN RELATION TO INVESTIGATION ON THE ALLEGED PRODUCTION OF COMPONENTS FOR LIBYA'S URANIUM ENRICHMENT PROGRAMME". The Star. 21 February 2004.
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