PAC 'missed out a lot' in HRD accounting affairs, says ex-COO

The Public Accounts Committee (PAC) missed "a lot of things" in matters concerning HRD Corp's accounts, said its former chief operating officer Ariff Farhan Doss.

In an exclusive interview with business weekly The Edge, Ariff (above) said this includes the "different treatment" accorded to the company's 2023 audit reports, compared to its 2020 and 2021 audited reports.

"Categorisation of different line items like utilisation of funds, profits retained, earnings - in previous years, these used to be separated, but, here (in the 2023 report) they are put together - one-line item.

"The treatment makes it more obscure, more difficult to analyse. Look at 2021/2022 (audit reports), and see how differently it's reported," Ariff said.

According to him, PAC did not catch on to these things, as it did not have the expertise to do so.

"PAC is mostly politicians - the National Audit Department should question. PAC doesn't have the resources to investigate, but the Audit Department does, and is more detailed," Ariff added.

Ariff also noted that it was "strange" of HRD to show a letter purportedly from Bank Negara in 2010, on the central bank's decision to withdraw its representative from the former's investment panel.

It is worth noting that PAC highlighted the absence of a Bank Negara representative in the HRD investment panel since 2017 as against the law.

"Bank Negara governors have changed quite a few times; you don't find a reason to go back when there's a new governor and ask about a previous decision in 2010.

"So, it's very strange that they (HRD Corp) are now showing as proof a letter approved in 2010. PAC didn't see that - they had no letter to show (during the PAC query).

"I have not seen the letter, so I cannot question (its veracity), but it's very strange that during the PAC (query), it was never soon," Ariff said, adding that he believe the affairs will continue to be "covered up".

Amend the act

Throughout the interview, Ariff stressed that the Pembangunan Sumber Manusia Berhad (PSMB) Act 2001 was "very weak", and allowed abuse, such as having investment decisions made without the approval of the investment panel, to take place.

According to him, minister-appointed board members hardly questioned or objected to investment proposals that chief executive officer Shahul Hameed Shaik Dawood presented after the latter said the minister greenlit them.

Weakness in the law also allowed HRD Corp to invest money without the approval of a board of directors, said Ariff.

"When (other outfits) want to invest, they have to get approval... HRD Corp is a company, and the Act says they can invest. The investment panel doesn't need to inform the board unless the board asks for it."

Ariff also spoke about HRD Corp's spending, dubbing an example of RM10 million spent on an annual conference as a "ridiculous amount of money" to spend on any event.

Ariff, who has been vocal about HRD Corp-related affairs since his "termination" from the company on May 15, also revealed that he has hired a bodyguard.

"People said I needed [a bodyguard]; so, I'm cautious... have to be careful. I know much more [than what has surfaced]."

Ariff opined that HRD Corp would be more careful about committing purportedly "shady deals" now that the media scrutiny was on them but said they would continue to happen as long as the PSMB Act 2001 is not amended.

He said moving forward, HRD Corp must ensure minimal intervention by the minister in the organisation's affairs, reiterating a relook at the act.

"Although you give the minister powers, the minister must be careful not to override decisions made by the board... because, otherwise, there is no meaning in having a board.

"Next, you cannot exempt the board from responsibility. It cannot be that if you have an investment panel, then you don’t need to get approval; because different panels can make decisions and just inform the board when they ask.

"When the board does not even know what the investment panel is doing, will they ask for information? Something is not right there also."

Despite his grievances, Ariff said not all regrets came out of his stint with HRD Corp, as it accorded him a “datukship”, and a wider network of business contacts in all sectors.

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