LET me emphasise that the Human Resource Development Corporation (HRD Corp) is allowed to invest under Section 27 of the PSMB Act 2001.
Section 26 makes it mandatory for an investment panel to be set up by the HRD Corp board and the investment panel must be composed of subject matter experts.
My question is, who are these experts? What are their qualifications and who makes the proposals to them? The CFO? The CEO? How long are they given to do the required research before making a decision?
Are there proper procedures in place to ensure checks and balances in addition to the few members of the investment panel?
A statutory body like the Social Security Organisation (Socso) needs to get the Finance Ministry’s approval before investing. HRD Corp is not a statutory body, so does it lack the necessary checks and balances?
Several board members of HRD Corp have informed the Parliament’s Public Accounts Committee (PAC) and the National Audit Department (JAN) that they were never informed of investments made.
HRD Corp responded they do not have to inform the board, which is represented by employers and union members who contribute to the HRD Corp fund via levy.
The levy contributed by employers for employee skilling is placed in HRD Corp on trust, HRD Corp is essentially holding these funds on trust until it is disbursed to employers who claim for employee training.
Isn’t it incumbent on HRD Corp to be more responsible and obtain employer consent for the more riskier investments? Were they even informed? Did they agree?
Employer contributions are placed and reported as liability in HRD Corp’s annual reports, why then is HRD Corp so carefree in making these investments? If categorised as liabilities it means that HRD Corp is only holding on to these levy contributions as a trustee.
How is it that 98% of investments have netted HRD Corp RM69 million, but 2% of investments can contribute to unrealised losses of RM49 million? Where is the logic? Why is the ratio of losses for these 2% investments so much higher than that for the 98%
Why were these investments in these loss making equities declined twice by the investment panel for renewal but approved the third time? Was the minister misled into approving it?
These are pertinent questions that need to be asked. The public, especially levy-paying employers have a right to ensure that there is accountability for money they are required to contribute. – July 12, 2024
Datuk Ariff Farhan Doss was HRD Corp’s chief operations officer before he was sacked in May