Petty cash in the mil­lions

Mil­lions were pour­ing into the HRDF. And for some high-rank­ing per­son­nel, their ex­or­bi­tant salaries and bonuses weren’t enough. Greed got the bet­ter of them and they treated the fund as their per­sonal bank, help­ing them­selves to some RM100mil, maybe more

The Star Malaysia - - Front Page - By AL­LI­SON LAI and MARTIN VENGADESAN news­desk@thes­

KUALA LUMPUR: High-rank­ing staff of the Hu­man Re­sources De­vel­op­ment Fund (HRDF) mis­ap­pro­pri­ated about RM100mil or about a third of the RM300mil in the fund.

While cer­tain man­age­ment staff mem­bers were over­paid with high salaries and bonuses, some train­ing providers and a num­ber of HRDF man­age­ment per­son­nel mis­used the fund in the name of train­ing to pur­chase com­mer­cial prop­er­ties.

Large sums of money were di­verted with­out the au­tho­ri­sa­tion of the HRDF board and there was col­lu­sion be­tween man­age­rial staff and ex­ter­nal par­ties to award con­tracts.

Hu­man Re­sources Min­is­ter M. Ku­lasegaran re­vealed th­ese wrong­do­ings at a town­hall meet­ing with rep­re­sen­ta­tives of em­ployer as­so­ci­a­tions and HRDF-reg­is­tered em­ploy­ers yes­ter­day.

He said that some mem­bers of the HRDF board of directors also did not de­clare their vested in­ter­ests to the board.

“There have been wrong­do­ings, such as abuse of du­ties, crim­i­nal breach of trust and ex­ceed­ing pro­ce­dure with­out re­port­ing to the board.

“(They were) run­ning (the HRDF) as though it was their own com­pany,” he said.

Ku­lasegaran, who ini­ti­ated a five-mem­ber in­de­pen­dent Gov­er­nance Over­sight Com­mit­tee (GOC) to re­view and probe the al­le­ga­tions, said that there were el­e­ments of fraud in the mis­use of the fund in the name of train­ing.

The HRDF is an agency un­der the Hu­man Re­sources Min­istry that man­ages a fund for hu­man re­source train­ing and de­vel­op­ment that were con­trib­uted by em­ploy­ers.

Re­gard­ing the al­leged mis­ap­pro­pri­a­tion of the fund, Ku­lasegaran said that the HRDF board was only in­formed af­ter the money was spent.

“Out of RM300mil, nearly RM100mil has been spent,” he said, adding that some depart­ment of­fi­cers, in other in­stances, also ex­ceeded their author­ity and ap­proved pro­jects beyond their au­tho­rised limit.

When asked, Ku­lasegaran said that some staff al­legedly in­volved in the wrong­do­ings are still hold­ing po­si­tions in the agency, while some had left.

“Af­ter the Pakatan Hara­pan govern­ment took over, three directors have since re­signed.

“If they have done any­thing wrong, ac­tion will be taken against them. We will let the process take place. It is not fair at this junc­ture to make al­le­ga­tions,” he said, adding that two po­lice re­ports have been lodged based on the GOC re­port.

Not deny­ing that more for­mer and cur­rent HRDF staff are ex­pected to be called up for ques­tion­ing, Ku­lasegaran said that par­ties at fault would be pur­sued through civil and crim­i­nal pro­ceed­ings.

“Af­ter this, I hope the HRDF man­age­ment will make the agency trans­par­ent and ac­count­able to the pub­lic,” he said.

Mean­while, a source that has left the HRDF or­gan­i­sa­tion told The Star that in the week be­fore the town­hall, three se­nior fig­ures within the or­gan­i­sa­tion were sub­ject to do­mes­tic in­quiries and re­leased from the com­pany.

An­other three se­nior mem­bers were on con­tract and when their con­tracts ex­pired re­cently they were not re­newed.

A key fig­ure im­pli­cated in the scan­dal re­signed soon af­ter GE14.

“Some se­nior fig­ures have sur­vived, but there is a def­i­nite cleanup ex­er­cise un­der way,” said the source.

In some cases, those due to leave

found them­selves locked out of their of­fices and es­corted off the premises by se­cu­rity when they ar­rived for work.

The sources said fi­nance per­son­nel and those in spe­cial pro­jects who re­leased funds with­out go­ing through the proper chan­nels, and those who in­vested money with­out any ac­count­abil­ity are be­lieved to be among those im­pli­cated.

“A lack of ac­count­abil­ity on the 30% given by com­pa­nies to the HRDF led to cer­tain fig­ures treat­ing it like a per­sonal piggy bank,” said the source.

He said the cul­prits are now look­ing at mak­ing deals by pro­vid­ing ev­i­dence against the lead­er­ship in re­turn for an easy way out.”

“The rot runs deep, and the money runs into bil­lions,” he said. “That’s why there was no choice but to stop the 30% pol­icy and fix the sys­tem be­fore restart­ing it.”

The source said that a key fig­ure im­pli­cated in the wrong­do­ings used tac­tics such as poor ap­praisals and in­ter­nal au­dits to try to force out those who spoke out against du­bi­ous prac­tices.

Some of the ques­tion­able prop­erty trans­ac­tions may have in­volved prop­erty in Bangsar South, said the source.

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