Sunday, August 02, 2020

Director's monthly income? How 'political appointees' may simply be form of corrupt practice, that must be ended in Malaysia?

How much money could an MP or 'political appointee' get when he/she is appointed a Director of a government owned or government linked company(GLC)? Note, some of peoples' representative and their family/friends could also be 'gifted' appointments as company Directors?

GLCs are not meant to be a training ground, or used as a platform, for political patronage at the expense of taxpayers,

Should all these 'gifts' or appointments be considered corruption or corrupt practices, that ought to be made an offence.

A person familiar with the pay/allowance and benefits that a usual Director gets informed me of this(It will help if others can also help provide relevant information of all this - since it is certainly a matter of public concern, especially when it involves politicians, political parties and the government.

A Director may get roughly, or even much more or less,

Director's Fixed Monthly Allowance - RM10,000
Director's Meeting Allowance = RM3,000 per meeting

[Now, the average number of meetings monthly is about 4.7, and that makes monthly meeting allowance of about RM14,000 - that is RM24,000 monthly, which is higher than the PM's salary?]

So, every month a person appointed as Director, just looking at this would be getting about RM24,000. Now, there may other 'allowances' given to Directors like 'entertainment allowance', transport allowance, etc - We really would not know UNLESS the government discloses this information for all government owned companies, and GLCs - the Malaysian public has the right to know.

Now, if one is the Chairman of the Board of Directors, then it may be even higher.

Besides DIRECTORS, we need to also monitor how much is the CEO and higher management staff being paid. Wonder how much the MAS CEOs have been paid? Salaries/Allowances should be fixed according to law, especially when it comes to government owned, and/or GLCs - better to have a provision for higher bonusses based on annual profits. So, if the company makes no profit  just losses - hence no bonus. Why reward Directors, CEOs and staff if you fail to bring in profits? It is also absurd that some are being paid a salary higher that the salary of a Prime Minister.

WHY? All this payments certainly have a direct impact on PROFITS - and for government owned companies, and GLCs, it means that it is our monies that are being affected.

It is also not uncommon, that the same person, may be Director in many other companies, including subsidiary companies.

QUALIFICATIONS - a Director is basically responsible for everything done(or not done) by the Company, hence he/she best be a person who is familiar with the business of the company - not just a 'seat warmer' Director, who attends meetings, votes as 'instructed' and happily receives all the monies and allowances. Only the OWNERS can overule decision of the majority of the Directors.

GLCs are not meant to be a training ground, or used as a platform, for political patronage at the expense of taxpayers,

Directors need to be qualified persons - who know the legal duty and obligations, who must be held personally responsible for the actions/omissions. They are not there to 'make money for themselves' or to make 'self-serving decisions', are they?  

Recently, the Najib's case relating to SRC came to an end - I wonder WHY none of the Directors of the said companies, or related/connected companies that facilitated such crimes have NOT YET been charged.

Were they simply 'politically appointed' Directors, who simply did as 'instructed' without even knowing that what they did was a crime in Malaysia? That may be a problem when we appoint unqualified persons or easily manipulated persons as Directors.

When a company commits a crime, all the Directors also ought to be charged jointly for the crime - save maybe those Directors who voted against - for after all the decision of Directors is a majority decision.

Then, if the Director, even if he, on record voted against illegal acts, he/she still has the obligation to report to the relevant authorities - Did he/she do this? Failure to do this may also mean he/she is an accomplice to the crime, is it not?

Financial institutions know the responsibility of Directors, and so when they give a company a LOAN, they generally insist on personal guarantees of Directors. So, if the company goes 'bankrupt' and cannot pay, then these Directors who gave personal guarantee will have to pay from their own pocket.

Maybe, for workers, all Directors must also be considered legally personal guarantors to workers for company debts. So, workers will no longer be 'CHEATED' simply because the company has been 'wound-up' or in layman's term, gone bankrupt. If the Directors are responsible to still pay to workers what the now 'bankrupt' company owes them, then not only workers will no longer be cheated BUT also these Directors will be more careful with what a company does or does not do, always concerned about worker's welfare.

Hopefully, now you will understand the significance of what Prime Minister Muhyiddin's large Cabinet, and political appointments as Directors(or Chairman's) of government owned or GLCs. What about the political appointment of persons as heads of government agencies - how much money do these appointees get?
Malaysians want a CLEAN government, with a focus of helping all citizens, especially the poor, the oppressed and the marginalized.

Government sometimes need to appoint Directors, to ensure that all that happens in the company is in accordance with government policy and interest - in such situations, if need be, the person appointed should really be an employee of the relevant Department or Ministry > but this will be part of their job, and, as such, they must never be receiving any additional monies/allowances from the Company directly - this may bring about a 'conflict of interest' when they are already paid as government employees.

For the monitoring of government owned companies and/or GLCs, this role is best played by Parliament. There should be special parliamentary committees appointed that will be responsible for these GLCs and/or government owned companies - with the power to receive complaints. investigate, conduct inquiries and even require regular reporting. If we had this in place, it would have been difficult for even 1MDB, SRC and related companies to break our laws, or allow anyone to use such companies wrongly.

Is it time to END all forms of corruption and corrupt practices - including these 'political appointments'?

Despite raising issues of 'too high pay and allowances' being paid to Directors, CEOs and even some government servants before GE14 - wonder what PH did when they came into power? Did they simply replace the 'beneficiaries' with their own 'political appointees' - We did not have new laws, that sets limits on salaries, allowances paid in Government or GLC companies, did we? We did not amend the law that makes in mandatory for the Auditor General to audit such companies, and submit their report to Parliament - so many reforms just did not happen under the PH. Will PN be different? Well looking at recent developments, I guess it will not happen too...

So, who will the people vote come next GE as their MPs? That is the question that we should all think about now..

See earlier related posts:-

Zahid Hamidi: GLC appointments of MPs to ensure govt policies and ‘aspirations’ carried out

Datuk Seri Ahmad Zahid Hamidi congratulated MPs from Umno, MCA, MIC and PAS who had been appointed to head GLCs and other institutions that are owned or linked to the government. ― Picture by Yusof Mat Isa
Datuk Seri Ahmad Zahid Hamidi congratulated MPs from Umno, MCA, MIC and PAS who had been appointed to head GLCs and other institutions that are owned or linked to the government. ― Picture by Yusof Mat Isa

KUALA LUMPUR, May 27 — Umno president Datuk Seri Ahmad Zahid Hamidi today posted a congratulatory message to politicians who were made heads of government-linked companies (GLCs) recently, adding that their appointments were to ensure that the Perikatan Nasional (PN) government’s policies and “aspirations” were implemented.

Taking to his Facebook page this evening, Zahid congratulated MPs from Umno, MCA, MIC and PAS who had been appointed to head GLCs and other institutions that are owned or linked to the government.

“Indeed, in the composition of the board of directors of companies, there are appointees who are politically appointed, for the purpose of implementing the policies and aspirations of the ruling party, but I am confident that the senior management members, who are the chief executives and managing directors, were still appointed from among professionals based on merit, qualifications, experience as well as suitability with their field of work,” he wrote.

“It was the previous tradition of the Barisan Nasional government that drove the economy and developed the people’s socioeconomy, through the involvement of GLCs and GLICs (government-linked investment companies) in many strategic projects and businesses, especially infrastructure development,” he added.

Zahid also urged all the appointees of the Muafakat Nasional pact between Umno and PAS to be trustworthy and dedicated in their responsibilities.

In April, PAS secretary-general and de facto Law Minister Datuk Takiyuddin Hassan was quoted by Malaysiakini as saying all of his party’s MPs who do not presently hold positions in government will be made heads of GLCs by the PN-led government.

“PAS has 18 MPs, eight are ministers and deputy ministers, one has been made the prime minister’s special envoy to the Middle East.

“This leaves nine more MPs. Alhamdulillah, I understand all government MPs will be given the responsibility to manage GLCs.

“This is because all of them are qualified. They are MPs,” he was quoted as saying to journalists at Kompleks Kota Darulnaim in Kota Baru.

Ironically, later that same month, Umno vice-president Datuk Seri Khaled Nordin issued a stern reminder to his PN colleagues, that it is not a government mandated by the people, as he criticised the use of “political rewards” to keep the frail coalition intact.

In a sharply worded statement levelled against allies Bersatu, Khaled said PN remains devoid of legitimacy, and that it could only garner public support through good governance and accountability.

Previously in March, the Pakatan Harapan (PH) Presidential Council called upon the PN administration to stop looking into political appointments and focus on the fight against the Covid-19 outbreak.

In a joint statement, DAP secretary-general Lim Guan Eng, Amanah president Mohamad Sabu and PKR president Datuk Seri Anwar Ibrahim said the government’s recent action to sack appointees from government entities like Majlis Amanah Rakyat (MARA), Federal Territories Resident Representative Council (MPP) and National Welfare Foundation (YKN), among others are inappropriate. - Malay Mail, 27/5/2020

'MPs are not necessarily qualified to lead GLCs'

KUALA LUMPUR: Being an elected representative should not be the prerequisite for heading a government-linked-company (GLC).

Vice-president of the Centre for A Better Tomorrow (CENBET) Datuk Simon Lim Seng Chai said it is unsurprising that the proposal for all government backbenchers to be appointed as heads of GLCs is unpopular with members of the civil society.

With a public health crisis at hand, and a looming economic recession to follow, the proposal by Pas’ secretary-general Datuk Takiyuddin Hassan is not only untimely but goes against good corporate governance, he said.

He added that the impact of Covid-19 has increased unemployment and retrenchment, as businesses are forced to reduce operating costs to survive. In a time of crisis, the calibre of top corporate leaders will be telling in navigating companies out of the storm.

“This is not a time to appease political supporters. Positions in GLCs, whether at board level or as top executives, should be attained on merit,” he said in a statement, today.

Lim said if a particular Member of Parliament has the necessary knowledge, expertise or qualification, perhaps it is justifiable.

However he said those appointed to head GLCs must be the best that the nation can offer, if they are to chart their recovery post-Covid-19.

Lim said competency is key, as corporations face a monumental task with the world anticipating a recession post Covid-19.

“Let us be clear – being on the right side of the political divide is not, and should not, be a criterion to head a GLC. GLCs are not meant to be a training ground, or used as a platform, for political patronage at the expense of taxpayers,” he said.

Lim added that the move by Prime Minister Tan Sri Muhyiddin Yassin to appoint technocrats such as Tengku Datuk Seri Zafrul Tengku Abdul Aziz to Cabinet indicates his desire to have the best talent serve the country, and also points to the dearth of expertise available among backbenchers.

“We strongly urge the Prime Minister to continue on the path of appointing the best talent available to do the job. And he must look beyond backbenchers,” he said.

Lim also questioned whether the political appointments are a necessity, in terms of corporate governance, business efficacy or business strategy, as well as how they would benefit a company and its shareholders.

“With an economic recession on the horizon, we should be looking at optimising resources by shrinking the top to maintain job opportunities for the lower income group, instead of enlarging the board of directors and laying off the M40 and B40.

“The B40 and M40 were the top priority when the Prime Minister announced the economic stimulus packages, and we hope that he continues on this track, he added.

Lim said Pakatan Harapan had reneged on its election pledge on political appointees to GLCs, though they have largely avoided mass appointment of MPs.

The Perikatan Nasional government can do better by upholding national interest over political interest, he added. - New Straits Times, 17/4/2020

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