Citizen Nades - By R. Nadeswaran, The Sun
EVERY right-thinking Malaysian should applaud Tourism Minister Datuk Seri Azalina Othman. She has come out in the open and exposed the wrongdoings of people under her purview. She offers no protection for the wrongdoers. On the contrary, she has warned of serious consequences. She has asked the state-owned Pempena Sdn Bhd and its subsidiaries to assess their operations and consider if they should continue.
EVERY right-thinking Malaysian should applaud Tourism Minister Datuk Seri Azalina Othman. She has come out in the open and exposed the wrongdoings of people under her purview. She offers no protection for the wrongdoers. On the contrary, she has warned of serious consequences. She has asked the state-owned Pempena Sdn Bhd and its subsidiaries to assess their operations and consider if they should continue.
The minister’s outburst is understandable. Some of these companies operated as if there were no norms or rules to govern them. Some of the people running them considered the companies to be their own fiefdoms and their private bank, drawing monies through dubious means.
They ventured in businesses and deals that were sure losers from the start. Why in the world would a government-owned company get involved in businesses in which it neither has the expertise nor the experience?
Were feasibility studies done before millions of taxpayers’ money was pumped in? Did those who made the decisions ask themselves: Why do we want to get into such businesses when our core business is promoting tourism? Azalina was quoted by the NST as saying: "If they have cheated the government in any way, they will be severely dealt with." This can be no further than the truth. Two audit reports – one done internally and another by PriceWaterhouseCoopers – have revealed the intrigues, the manipulation of funds, fraud, deception and above all, a lack of common sense which a reasonable person is expected to do when he is entrusted with public money.
Instead of acting as people with business acumen, they acted as godfathers and Santa Clauses, dishing out money from a bottomless pit. There were no due diligence tests with supposed partners; there were no checks on current market rates, but what is more damning is their failure to take action to recover monies which is rightfully theirs.
For example, Pempena advanced RM300,000 to one Umi Hafilda (does the name ring a bell?) for a Amir Diab Live in Kuala Lumpur concert. The report says that "Pempena did not even sight the contract between the parties before issuing the cheque" and as expected, the concert did not take place.
The first question to ask is: Why is Pempena paying show promoters? The second question is: How does a concert help promote tourism? Perhaps, they took a leaf out of the Sport Ministry which paid RM17 million for the Champions Youth Cup tournament to "promote tourism" last year. We’ll leave that to rest, at least for the moment.
Back to Umi Hafilda. When the concert did not materialise, she issued three cheques to Pempena – all of them bounced – there was no money in her account. What did Pempena do? Sat with arms folded because those in the know were aware that she was an undischarged bankrupt, one of the report states.
But that’s not all. As Azalina points out, RM11 million went into the taxi business and she also asks: "We need to find out where all the money that was invested went to. The company has failed to pay the hire purchase loan for the taxi instalments."
Absolutely right! For that kind of money, working at a conservative cost of RM100,000, there should be 111 taxis – bought outright without a loan, but records show that all of them were bought via hire purchase. So, where did the money go?
What stands in an empty lot somewhere in the Klang Valley are taxis – repossessed by the bank for not servicing the loan – ready to be auctioned. It’s a standing monument of shame that has been brought on by the companies’ own doing. In the first place, why should it go into the taxi business and compete with commercial operators? It can be understandable if it created a niche market but in this case, it was competing with individuals and companies who had both the know-how and the experience.
That’s not all. The report states that Pempena bought one million shares at RM1 each in a company called SD Corp Sdn Bhd, which had forecast a turnover of RM8 million and a profit of RM100,000 for the first year. But the company ran up a loss of RM2 million. To add insult to injury, Pempena paid RM2.1 million for the shares but the share certificates had yet to be delivered as of July 31.
But more shocking are the claims that minutes of meetings of the board of directors of Pempena had been changed by hidden hands. The internal audit confirms this by saying: "The amendments of the minutes are a serious offence as it involves the appointment of contractors without going through the proper process. No action was taken against those responsible for changing the minutes although it was brought to the attention of the management."
These are some of the startling revelations made by the auditors. The report is a catalogue of shame and it exposes the looting of people’s money carried by a few officials using tourism as a front. It outlines the methodologies used to fraudulently siphon public money into the pockets of individuals. Besides, it highlights payment of monies to people without going through the proper checks. The sad part is that some of these monies cannot be re-couped – some of the recipients are either bankrupt or have been blacklisted by Bank Negara.
No one will disagree with Azalina. She is doing the right thing by exposing the scam committed by people entrusted with public money. They should go to jail for cheating the people. But the inevitable question is: Will the law be allowed to take its course? For that to happen, an official complaint must be made to the police, not the Anti-Corruption Agency because there are no elements of graft – they are simple cases of fraud. But even if a police report is made, will action be taken or will these perpetrators and cheats have some "godfathers" protecting them.
They ventured in businesses and deals that were sure losers from the start. Why in the world would a government-owned company get involved in businesses in which it neither has the expertise nor the experience?
Were feasibility studies done before millions of taxpayers’ money was pumped in? Did those who made the decisions ask themselves: Why do we want to get into such businesses when our core business is promoting tourism? Azalina was quoted by the NST as saying: "If they have cheated the government in any way, they will be severely dealt with." This can be no further than the truth. Two audit reports – one done internally and another by PriceWaterhouseCoopers – have revealed the intrigues, the manipulation of funds, fraud, deception and above all, a lack of common sense which a reasonable person is expected to do when he is entrusted with public money.
Instead of acting as people with business acumen, they acted as godfathers and Santa Clauses, dishing out money from a bottomless pit. There were no due diligence tests with supposed partners; there were no checks on current market rates, but what is more damning is their failure to take action to recover monies which is rightfully theirs.
For example, Pempena advanced RM300,000 to one Umi Hafilda (does the name ring a bell?) for a Amir Diab Live in Kuala Lumpur concert. The report says that "Pempena did not even sight the contract between the parties before issuing the cheque" and as expected, the concert did not take place.
The first question to ask is: Why is Pempena paying show promoters? The second question is: How does a concert help promote tourism? Perhaps, they took a leaf out of the Sport Ministry which paid RM17 million for the Champions Youth Cup tournament to "promote tourism" last year. We’ll leave that to rest, at least for the moment.
Back to Umi Hafilda. When the concert did not materialise, she issued three cheques to Pempena – all of them bounced – there was no money in her account. What did Pempena do? Sat with arms folded because those in the know were aware that she was an undischarged bankrupt, one of the report states.
But that’s not all. As Azalina points out, RM11 million went into the taxi business and she also asks: "We need to find out where all the money that was invested went to. The company has failed to pay the hire purchase loan for the taxi instalments."
Absolutely right! For that kind of money, working at a conservative cost of RM100,000, there should be 111 taxis – bought outright without a loan, but records show that all of them were bought via hire purchase. So, where did the money go?
What stands in an empty lot somewhere in the Klang Valley are taxis – repossessed by the bank for not servicing the loan – ready to be auctioned. It’s a standing monument of shame that has been brought on by the companies’ own doing. In the first place, why should it go into the taxi business and compete with commercial operators? It can be understandable if it created a niche market but in this case, it was competing with individuals and companies who had both the know-how and the experience.
That’s not all. The report states that Pempena bought one million shares at RM1 each in a company called SD Corp Sdn Bhd, which had forecast a turnover of RM8 million and a profit of RM100,000 for the first year. But the company ran up a loss of RM2 million. To add insult to injury, Pempena paid RM2.1 million for the shares but the share certificates had yet to be delivered as of July 31.
But more shocking are the claims that minutes of meetings of the board of directors of Pempena had been changed by hidden hands. The internal audit confirms this by saying: "The amendments of the minutes are a serious offence as it involves the appointment of contractors without going through the proper process. No action was taken against those responsible for changing the minutes although it was brought to the attention of the management."
These are some of the startling revelations made by the auditors. The report is a catalogue of shame and it exposes the looting of people’s money carried by a few officials using tourism as a front. It outlines the methodologies used to fraudulently siphon public money into the pockets of individuals. Besides, it highlights payment of monies to people without going through the proper checks. The sad part is that some of these monies cannot be re-couped – some of the recipients are either bankrupt or have been blacklisted by Bank Negara.
No one will disagree with Azalina. She is doing the right thing by exposing the scam committed by people entrusted with public money. They should go to jail for cheating the people. But the inevitable question is: Will the law be allowed to take its course? For that to happen, an official complaint must be made to the police, not the Anti-Corruption Agency because there are no elements of graft – they are simple cases of fraud. But even if a police report is made, will action be taken or will these perpetrators and cheats have some "godfathers" protecting them.
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