TEKUN LOST RM209M IN 2015
Poor planning, bad governance and debts to blame
THE National Entrepreneurial Group Economic Fund (Tekun) accumulated losses amounting to RM209.28 million as of 2015, Parliament was told yesterday.
The losses were brought about by massive debts to the government and a huge amount of bad debts written off by Tekun.
In the Auditor General’s Report 2016 Series 1 presented to Parliament, the management of activities in Tekun was in accordance with the goal of its incorporation but was not properly planned.
“The corporate governance practices are also less than satisfactory,” the report said.
Audits carried out from May to October last year and February this year found that comprehensive studies were not done to evaluate the effectiveness of fund utilisation by entrepreneurs to start or expand their businesses.
The report said: “The performance of repayment compared with target was only between 78.1 per cent and 96.9 per cent.”
As at 30 June last year, the report stated that non-performing finance stood at 38 per cent (RM769.34 million) from the total repayment arrears of RM2.02 billion.
“Total bad debts being written off were RM410.61 million (9.6 per cent) from total financing and collected repayments were RM74.63 million (18.2 per cent).
“Targeted timeframe and outcome for six Entrepreneur Development Special Programmes were not set.”
The report said Tekun Credit Guarantee Scheme failed to achieve its goal due to a lack of response from suppliers.
“Joint Programme Committee for Mentor Mentee Programme was not formed and programme monthly reports were not submitted by the three mentor companies.
“Failure in the implementation of Tekun Entrepreneurship Portal, Tekun Entrepreneur Community Card and Cyber Mall resulted in losses of RM872,035 and members of the Audit, Integrity and Risk Committee did not have an accounting background.”
The report said corporate governance practices on financial management were not managed properly.
To improve the performance management of the company, the report recommended that Tekun conduct a comprehensive study to evaluate the effectiveness of fund utilisation by entrepreneurs and reasons for the failure of their businesses.
Tekun is also required to conduct a feasibility study before execution of programmes and to monitor them to ensure their objectives are achieved as well as timely repayment.
The report said the audit also revealed that Tekun increased its total financing from RM2.69 billion to RM4.29 billion for 473,982 entrepreneurs within 18 years.
Tekun must conduct a comprehensive study to evaluate the effectiveness of fund utilisation by entrepreneurs.