Hutchison Whampoa

Testing times for veteran

PUBLISHED : Saturday, 11 June, 2011, 12:00am
UPDATED : Saturday, 11 June, 2011, 12:00am


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For Simon Murray, the 71-year-old former Hutchison Whampoa managing director, the past few months have been a period of mixed fortunes.

Murray, a seasoned adventurer and former French Foreign Legionnaire, scored the chairmanship of Glencore in mid-April, weeks ahead of the giant commodities trader's London and Hong Kong US$10 billion IPO.

Just after that appointment, the Hong Kong and London-based businessman generated headlines worldwide by telling a British newspaper he was reluctant to hire women in case they became pregnant.

And now his position on the board of Toronto-listed Chinese timber firm Sino-Forest, which was accused of fraud in a June 2 report by American short seller Carson Block, thrust him back into the spotlight.

Block's research house Muddy Waters, which stands to score a huge profit from its short sale, alleged Sino-Forest overstated timber holdings and sales in Yunnan province. The company denies those allegations, while its shares have crashed 72 per cent since June 1.

Murray said in comments relayed by a Hong Kong-based spokesperson that he could not discuss Sino-Forest because of an independent inquiry into the company being carried out by PricewaterhouseCoopers.

The former Hutchison taipan, who is not involved in the inquiry, has been on Sino-Forest's board since 1999. He is also a director at Greenheart Group, a Hong Kong-listed subsidiary of Sino-Forest that owns timberland in Suriname - in South America - and New Zealand. The Hong Kong-based private equity fund he chairs, GEMS, bought a US$25 million convertible bond issued by Greenheart last August.

Some analysts say the Sino-Forest scandal may affect Murray's credibility among Glencore investors.

'If the allegations prove correct, investors may query his knowledge of the underlying operations of the companies whose boards he sits on,' said John Meyer, an analyst at London boutique investment bank Fairfax IS.

Murray, through his spokesperson, said he thought Muddy Waters did not understand Sino-Forest's business. However he understood the timber company well because of his decades of experience in the resources industry.

Murray led Hutchison's 1991 acquisition of Husky Energy, the Canadian oil producer. He first worked in the logging industry in the early 1970s when he was an executive assistant at Jardine Matheson, helping to oversee timber plantations in Indonesia and in Malaysia.

Sino-Forest called Muddy Waters' Block a 'shock jock' and dismissed his claims as 'inaccurate, spurious and defamatory'.

Murray, who joined the Foreign Legion aged 19, ran the 242-kilometre Marathon des Sables in the Moroccan desert aged 60 and climbed Mount Everest aged 63, probably has the strength of character to shrug off the Sino-Forest scandal.

He joined Hutchison as managing director and Li Ka Shing's chief lieutenant in 1984, then left to run Deutsche Bank's Asia-Pacific operations in 1993. He began supporting Sino-Forest, which claims to be the mainland's largest timber supplier, a couple of years later.

According to an interview Sino-Forest chief executive Allen Chan gave Canada's Globe and Mail, Murray attended the signing ceremony for a US$20 million loan Deutsche Bank extended to the then-fledgling forestry firm in 1995.

'He was a very nice guy to support such a small company,' Chen said.