KUALA LUMPUR – The SME Association of Malaysia (SME Malaysia) is facing turmoil following the removal of its national president during an allegedly invalid extraordinary general meeting (EGM), compounded by the association’s failure to conduct internal audits for the past three years.
Conflict within the association is believed to have resulted in high-ranking office bearers lodging reports to the police and Registrar of Societies (RoS) over the removal of president Ding Hong Sing during an EGM yesterday.
Ding claims that since the EGM, which was called by SME Malaysia national secretary-general Chin Chee Seong, did not follow due processes outlined in the association’s constitution, the gathering and subsequent decisions should be rendered “invalid”.
“I have issued a memo to all association members to properly note that the EGM is invalid due to the process (that was conducted). The EGM should be called according to our constitution,” Ding said when contacted by Scoop yesterday.
“I have also referred the memo to the RoS to make sure that we are moving according to our constitution. I don’t know what the intention is (behind) the move (to call for the EGM), (but) I believe there is a personal agenda (involving) improperly conducted audits and accounts.”
According to documents sighted by Scoop, Ding issued a legal notice on April 3, including a legal letter from the association’s legal advisor, Messrs Wong & Ting, to SME Malaysia members regarding the EGM notice dated April 1, sent out to members via email.
The lawyers referenced Clause 7(1)(vi) of the association’s constitution, which stipulates that an EGM may be called by the national president from time to time whenever deemed fit or necessary.
The legal representatives also pointed to Clause 7(1)(iv) on how the president shall appoint a five-person sub-committee to organise general meetings, which must be set at least one month from the date of the sub-committee’s appointment.
The legal firm argued that besides Chin having “no rights and quorum” to represent the council, the timeframe provided for the April 1 EGM notice is insufficient, and there has been no appointment of a sub-committee by the president, who had not approved the EGM notice.
However, in a response to the legal notice, Chin’s legal counsel contended that their client had obtained council members’ approval to call the EGM.
“In situations where the president fails to call for an EGM as necessitated by the circumstances or the association’s needs, the council possesses the authority to convene such a meeting,” lawyer S. Ravenesan argued in a legal letter issued on April 4.
For the record, Ding tendered his resignation as a Social Security Organisation (Socso) board representative on April 11, citing a need to protect the organisation’s reputation as he sought to resolve “non-compliance” issues related to the SME Association.
He told Scoop that he believes his resignation from Socso also contributed to his ousting yesterday. He explained that the association played an advisory role on the Socso board.
‘Non-compliances’ due to lack of internal audits for past three years
Meanwhile, Ding also disclosed that the association’s previous two annual general assemblies (AGM) featured “non-compliances” as it had not engaged internal auditors to carry out their duties as stipulated under Clause 11 of its constitution.
The provision states that two members shall be appointed by the council to be internal auditors tasked with inspecting the financials of the associations while ensuring that their monies are accounted for and correct in accordance with the law.
“I have sought advice from the RoS (on) strictly following the clauses in our constitution. We have to rectify the non-compliance before the coming AGM, (on when) (as) the issue needs to be properly addressed to the members for their understanding and approval,” Ding said.
Ding said that he had declined the request by some council members to change the internal auditor as the individual was properly appointed by the council and recognised by the RoS.
“I have also declined some council members’ request to sign the audited 2023 account, as I am of the view that the account must be duly inspected by the internal auditor before I can sign the account.
“I will need to make sure the 2021, 2022, and 2023 audited accounts are fully inspected before I sign and call for the AGM. I trust that the 2023 accounts will take a longer time to inspect as there were many internal auditors’ queries related to expenses and payment transactions.
“Should we need longer time (to inspect the annual accounts), I may write to the RoS to request an extension of the AGM,” he said, adding that the upcoming AGM is initially scheduled to be held by May 31.
Asserting that he has no intention to contest in the upcoming AGM, Ding stressed that he will not compromise on compliance with the association’s constitution, reminding elected council members that association members have entrusted them with certain responsibilities.
“I have served the association for more than 20 years, and this is the first time that my credibility is being challenged,” he lamented.
“I trust that I have been very supportive of my council team and office bearers, (who) I hope will continue to support me in carrying out tasks according to the constitution, (so) I will be at ease handing over the presidency to the next postholder.” – April 24, 2024