From Walter Sandosam
HRD Corp is an enigma mysterious, perplexing, baffling and difficult to figure out. Its activities border on the inexplicable, and the company has recently been in the news for the wrong reasons.
At the extreme, it is an irritating abscess with continuing purulent discharge. What is causing this cancerous malfeasance?
In the excitement of the day, some are not able to separate the woods from the trees. Current opinion pieces centre around operational deficiencies set against a backdrop of possible abuse of power and corruption.
The bigger picture is the legislation that gave life to it, the continued ineffectiveness of the board, lack of a clear strategy to meet objectives, poor oversight and subservience to the minister, among others.
It appears HRD Corp has lost sight of its core objective. Given its billions in reserves, some have described HRD Corp as a cash cow waiting to be milked, legally or illegally, to serve vested interests.
Previously known as the Human Resource Development Fund, HRD Corp was set up with the noblest of intentions: to upskill talents and skills in the workforce. It is funded through collection of minimal levies on employers to facilitate this altruistic initiative.
The Malaysian Anti-Corruption Commissions investigation of its CEO in 2018 speaks volumes. The results of this investigation are on record, including the purchase of properties and dubious training contracts, among others.
M Kulasegaran, the minister at the time, highlighted various issues, including alleged misappropriation, fraud, collusion, vested interests not declared and bypassing of the board.
Kulasegaran initiated a five-member independent governance oversight committee to review and probe the allegations. Somehow, this pattern closely resembles what is being investigated now.
In April 2020, the boards chairman, the late and much-respected retired senior civil servant Noor Farida Ariffin, its CEO and five board members were removed consequent to a new human resources minister taking on the reins.
They had been appointed in 2018, according to Noor Farida, to help implement the recommendations of the governance oversight committee to get rid of conflict of interest situations and abuse of power which were allegedly prevalent.
Six years on, pursuant to the auditor-generals report, MACC has initiated another round of investigations. At a cursory glance, it appears policies, procedures and practices are still not in place allowing potentially for a repeat of events of the past.
Will the outcome be any different?
The reality is that the simplistic but well-intentioned core objective got hijacked along the way. The moment there is political intervention, HRD Corp is subject to the vagaries of the ruling party of the day, as are other similar agencies.
In general, politicians by nature have difficulty subscribing to the principles of good governance, despite pontificating otherwise. It is all about support to ensure political survival. Even though they come into office condemning the practice of appointments to lucrative posts in GLCs /GLICs as a reward, politicians go on to subsequently do the same.
The death knell of any hint or perception of good governance is contained in Section 50 of the Pembangunan Sumber Manusia Bhd Act 2001 (Human Resources Development Fund Act 2001).
It reads: The corporation shall be responsible to the minister, and the minister may give directions which are consistent with the provisions of this Act to the corporation and the corporation shall, as soon as possible, give effect to all such directions.
It is clear from the above as to who is the puppet master. This supremacy of authority is embodied in the power given to the minister. The CEO, who is the direct link to the minister, is typically appointed by the human resources minister of the day.
Therein is the irony. Where does ones loyalty lie, and how does the chairman of the board corral such a stud? This puts paid to any form of good governance, unless politicians are angels, which they inevitably are not save perhaps for a few!
In HRD Corp, one thing is crystal clear. The board has not been up to speed in discharging its fiduciary duties. It has allowed questionable activities to occur. This is even more appalling when senior civil servants (appointed consequential to their positions in various ministries) did not raise red flags on purportedly unhealthy activities.
The tone of subservience to political masters appears to have imbued certain portions of the civil service. Some need to think of their prospects post-retirement. How then can one speak of, or introduce, good governance? It is an alien concept.
It is reported that MACC has requested for more time to complete their investigations.
The concerns at HRD Corp include risky investments, accounting treatment, the central banks unilateral call to withdraw from the investment panel, lack of definitive policies on reporting to the board (the constituents of which are senior fellow civil service officers from other ministries), provisions of various Acts, and a host of other issues that may fall into no-mans land. These are unique.
Hopefully, the task left for MACC is to connect the dots and consider what is prosecutable and what is not. MACC is treading into challenging territory.
Nonetheless, investigations need to be completed speedily so as to serve as a deterrent to the corrupt. The fact that nothing materialised after the 2018 investigation is a concern if investigations were not up to mark, or if HRD Corp activities were conducted within the allowable parameters of the Act ethics and integrity aside.
Since 2018, there have been four human resources ministers. The current minister is left addressing alleged lack of good governance practices, with corruption and abuse of power at the forefront. At the core lies the provisions of a possibly outdated Act and the lack of a robust governance structure.
The stakeholders await and expect a speedy investigation. Garden leave should be short.
Walter Sandosam is a past member of MACCs independent operations review panel.
The views expressed are those of the writer and do not necessarily reflect those of FMT.