COMMENT | Company directors should be held responsible

COMMENT | It took 12 years for the Port Klang Authority (PKA) to go from the conceptual stage to completion, during which it was under three prime ministers, four transport ministers, and five chairpersons.

The hole left behind in the Port Klang Free Zone (PKFZ) development was a whopping RM12.4 billion, which taxpayers continue to pay in instalments.

The damning report by PriceWaterhouseCoopers in 2009 concluded that the financial viability of the PKFZ was highly uncertain, as the project was not generating sufficient revenue to cover its operating expenses.

The report also identified the (errant) major players, weaknesses in the system, and shortcomings in the execution, which I had then termed an “index of shame”.

The then-opposition leader Lim Kit Siang argued with the then-transport minister Ong Tee Keat almost daily, picking up key points in the report.

The road not taken

When the PKA board of directors subsequently met to discuss the report, former PKA general manager M Rajasingam moved a resolution to take legal action against 49 previous directors who, at one time or another, served in the preceding years.

He argued that there was a dereliction of duties and they had failed to carry out their responsibilities. It was this, he argued, that led to colossal losses incurred.

The then chairperson, Lee Hwa Beng, supported this but did not get traction from other directors, including senior civil servants and politicians representing the component BN parties.

The civil servants did not want to “offend” their brethren officers, while the politicians did not want to bite the hands that fed them. Departing from the norm would mean being shown the door.

It was a lost opportunity as it would have been a test case, and a precedent would have been set on directors of statutory bodies and government agencies.

In hindsight, if that had happened, then many agencies would not be in the mess they are in, hoping to escape responsibilities with apologies and not-so-convincing justifications.

Scandals, scandals, scandals

Last Friday, the constitution of the National Farmers’ Association’s (Nafas) constitution was suspended “due to confusion in the administrative efforts”, which affects the organisation’s interests in relation to its members.

“Nafas needs immediate recovery action due to the issues of internal conflict and disharmony that have affected it in terms of operations and functions,” said Farmers’ Organisation Authority director-general Amir Matamin.

Before that, the issue of the share value of Khazanah Nasional and Permodalan Nasional Berhad’s (PNB) in FashionValet dropping by almost RM44 million when the business was sold last year, made the headlines.

In a written parliamentary reply, the Finance Ministry stated that Khazanah invested RM27 million and PNB RM20 million in 2018 to acquire a minority stake in the local fashion brand.

It was part of a gambit to boost bumiputera businesses in the e-commerce sector.

The two founding directors, fashion entrepreneurs Vivy Yusof and her husband Fadzaruddin Shah Anuar, apologised for the issue, explaining that they expanded their business too aggressively and did not sufficiently plan for a “rainy day”.

FashionValet board member Aireen Omar defended the brand’s founders, who have since apologised and relinquished their positions in the business.

“There is no such thing as scandal or fraud or siphoning of money. Not at all. I mean, I sit on the board, and I look at the numbers. And definitely, there’s no such thing lah!” she declared.

But was she aware that in December 2018, FashionValet purchased 30 Maple Sdn Bhd - a company that appears to be owned wholly by Vivy and Fadzarudin - for RM95 million?

Quoting filings to the Companies Commission (SSM), Scoop reported that the purchase was made the same year Khazanah and PNB invested RM47 million.

Then there’s the three-month bonus supposedly paid to a top executive despite the company achieving less than half of its key performance index (KPI).

During a Pelaburan Hartanah Berhad (PHB) board of directors meeting early this year, it approved a payout of three months' basic salary equivalent to RM210,000 to the executive.

What is the fuss all about?

In 2018, a top executive of the Human Resource Development Fund (as it was then known) was paid the equivalent of 11 months’ salary as a bonus.

Investigations showed that a top executive and three deputies were lavishly rewarded with high pay hikes and bonuses before GE14 last year.

The 2017 performance bonuses for the four were signed on Feb 28, 2018 by then-human resources minister Richard Riot Jaem, bypassing HRDF’s establishment and benefits committee (EBC), which usually determines remunerations and bonuses, The Star reported, citing from documents it sighted.

Neither the EBC nor HRDF’s board of directors was informed about the matter, even though the HRDF Act only empowers the minister to give directives to the board and not bypass the board to provide approvals.

It has always been business as usual after a scandal or significant revelations of misuse of power or money. The directors collect their fees and allowances, and the shenanigans continue.

If only the PKA directors had been taken to court, not only would it have been a deterrent, but it would also have drawn up the parameters on the duties and responsibilities of directors.

But a miss is as good as a mile!

R NADESWARAN is a veteran journalist who writes on bread-and-butter issues. Comments: citizen.nades22@gmail.com.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

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