Home English News “HRDF Consolidated Fund misappropriated to buy property, pay bonuses” – Kula Segaran

“HRDF Consolidated Fund misappropriated to buy property, pay bonuses” – Kula Segaran


KUALA LUMPUR — A large sum of money from the Human Resources Development Fund’s (HRDF) Consolidated Fund had been misappropriated by some members of the previous management, including to purchase property in the country without the approval from the HRDF Board.

Human Resources Minister M. Kula Segaran in revealing the findings by the Governance Oversight Committee (GOC) said the investigations found that there were some elements of fraud as well, including in high salaries and bonuses paid to selective management staff.

“Large sums of money were also diverted without the authority of the HRDF Board for less impactful training programmes,” he said in his speech during a town hall session with employer associations and registered employers here, yesterday.

The minister said that there were also evidence of abuse of power with some training providers and certain HRDF management personnel misusing the Consolidated Fund in the name of training.

“In these instances, the HRDF Board was only informed after the money were spent. In other instances, the management exceeded their authority and approved projects beyond their authorised limit,” he said.

Kula Segaran said the government would pursue legal action against the parties involved, adding that two police reports had been lodged on the matter since the final report by GOC was presented to the HRDF Board on Oct 6.

Speaking at a news conference later, the minister, however, did not reveal the sum of money and said he would leave it to the police to investigate.

“Whether it is RM1 or RM1 million, it does not make any difference, a theft is a theft, a CBT (criminal breach of trust) is CBT, wrong is wrong,” he said.

He also urged the HRDF Board to take the recommendations made by the GOC to strengthen the Consolidated Fund and that it should be as transparent as possible and be accountable to the public.

“Its primary focus should be to train, retrain and upskill the workforce. It shouldn’t be sidetracked to do other things. They (HRDF) are not like investment company or not a company in business. Their core business is training,” he said.

The HRDF came into public scrutiny in June this year following an expose on allegations of misappropriation of fund amounting to RM300 million by its previous management.

Following that, a five-member GOC led by former international trade and industry secretary general Tan Sri Rebecca Sta Maria was formed on June 28 and was tasked to review all aspects of the board’s governance framework.

Sta Maria, who was also present at the news conference, said the committee had also looked into issues surrounding the  consolidated fund such as whether there was legal basis for the setting up the consolidated fund.

Under the Pembangunan Sumber Manusia Berhad Act 2001, registered employers with HRD are required to contribute one percent levy on their employee’s monthly salary to the fund, where 30 percent of the levy channeled to the Consolidated Fund since 2016 to help train employees from small companies that could not afford to contribute to HRDF and employees from the B40 category.