A controversy-stricken subsidiary company of the Tourism Ministry has found itself under the spotlight again for the wrong reasons.

The 2008 Auditor-General’s Report revealed that Pembangunan Pelancongan Nasional Sdn Bhd (Pempena) invested up to RM41.90 million on subsidiary companies since 1976 but has yet to reap profit from any of its ventures.

Auditor-general Ambrin Buang said Pempena has made unfruitful investments in subsidiary companies because it did not study the matter in its entirety with due diligence before coming to a decision.

tourism malaysia pempena controversy 130109 The subsidiary company had lost RM2.76 million and RM3.87 million for investments made in 2006 and 2007 respectively.

Of its investments in seven subsidiary companies, Malaysian Travel Business Sdn Bhd is the sole profit-reaping venture, showing a RM438,240 gain.

The six others - Malaysia Convention & Incentive Bureau Sdn Bhd, Malaysia My Destination Sdn Bhd, Pempena Executive Taxi Services Sdn Bhd, Pempena Limousine & Taxi Services Sdn Bhd, Lambaian Maya Sdn Bhd and Viva Orient MM2H Sdn Bhd - recorded losses amounting to RM3.74 million in 2007, stated the AG’s report.

Ambrin also pointed out that Pempena ought to pay the government a 10 percent dividend from its RM13.86 investment profit in 2005 but failed to do so, as required by the Treasury Circular No. 11 issued in 1993.

He also explained that subsidiary companies asking for allocations should get prior approval from the Malaysian Tourism Promotion Board’s (MTPB) before the matter is placed under the purview of the Tourism Ministry, as stated in the Treasury Circular No. 3 of 1998.

Bypassing the MTPB, Pempena breached the circular when it approached the Tourism Ministry directly for RM3.10 million in funds for the Langkawi International Fashion Zone project, he said.

In addition, the ministry spent an extra RM3.09 million on renovation works that should have only cost RM1.95 million, stated the report.

‘Scrutinise proposals’

The auditor-general urged MTPB members to give sound and appropriate advice to Pempena when suggesting potential investments.

Ambrin said Pempena's investment proposals should be scrutinised based on set criteria, supported by a capital investment returns report and approved by board members before a request for allocation is submitted to the ministry.

NONE The report also revealed that the Malaysian Anti-Corruption Commission and the police commercial crimes unit is probing Pempena's involvement in nine subsidiaries.

These include Dalamasa Sdn Bhd, Malaysian Restaurant Limited London-Awana Chelsea, Malaysian Restaurant Beijing Limited-Awana Beijing, Malaysian Restaurant Hyderabad Limited-Awana Hyderabad, Awana Dubai, D'Mlaysia Restaurant (Australia) Pty Ltd, Sri Kebaya Restaurant (M) Sdn Bhd, Airnett Catering Services Sdn Bhd and Sky Vans Sdn Bhd.

Independent audit findings

on these subsidiaries had earlier revealed dodgy investments, missing assets and payment of advances without contract. The Auditor-General’s Report was tabled in Parliament last week.

Tourism Minister Ng Yen Yen told reporters that investigations into Pempena are being wrapped up.

“Definitely, Pempena is an issue that we will not just put aside. A special committee has been set up to investigate the issue,” she was reported as saying in Star today.