‘MILLIONS IN HRDF FUNDS MISUSED’
Civil, criminal proceedings will be launched, says minister
MONEY from the Human Resources Development Fund was diverted to the purchase of property and payment of hefty bonuses to selected individuals The human resources minister says there are ‘elements of fraud in the use of the fund’, and that court action will be instituted.
ASIGNIFICANT portion of money belonging to the Human Resources Development Fund (HRDF) had been misused by individuals linked to the previous management.
Human Resources Minister M. Kulasegaran said the money, which amounted to millions of ringgit, was used to buy property and pay salaries and bonuses of selected employees.
Commenting on the HRDF’s Governance Oversight Committee report yesterday at a town hall session with employer associations and registered employers here, he said in some cases, the acts were done without the board of directors’ knowledge.
HRDF, formed in 1993 as the Human Resources Development Council, is an agency under the Human Resources Ministry. HRDF was given the mandate by the government to boost the workforce to contribute to the country’s vision of becoming a high-income economy.
“Along the way, these requirements and objectives took a back seat, and the fund was diverted to activities that were less impactful.
“It was found that there were elements of fraud in the use of the fund,” he said.
He said some members of HRDF’s previous board of directors did not disclose their personal interests to the board.
“We will launch civil and criminal proceedings against them.”
He said two reports were lodged last week on the financial abuse.
“We cannot reveal the details due to legal issues. HRDF has obtained legal advice. Abuse of power and financial abuse did take place and the senior management has lodged reports after being informed of the developments,” he said.
He said there should not be any finger-pointing, and it was best to leave the matter to the authorities.
He said effective Nov 15, the government would discontinue the 30 per cent deduction from the levy contributed by registered employers to HRDF’s Consolidated Fund.
He said the decision was made after deliberation with HRDF’s Governance Oversight Committee, board of directors and management.
He said the final payment to the Consolidated Fund was for October.
Under the Human Resources Development Bhd Act 2001, registered employers with HRDF are required to contribute a one per cent levy on their employee’s monthly salary to the fund, where 30 per cent of the levy is channelled to the Consolidated Fund since 2016 to train employees from small companies that could not afford to contribute to HRDF and employees from the Bottom 40 per cent category.
Kulasegaran said although employers had the impression that their contributions to the Consolidated Fund should not be used to train non-contributors, they should look at the bigger picture as they were helping the country train the workforce.
HRDF chief executive V.E. Elanjelian said HRDF was looking at initiatives to maximise the RM200 million in the Consolidated Fund for the benefit of employees.
Human Resources Minister M. Kulasegaran speaking at a HRDF town hall in Kuala Lumpur yesterday.