Sslee blog
HRC: My official report to HRC in-house Board Whistleblowing Committee (Draft)
I intend to send out below email on next weekend follow by a confidential email to SC/Bursa.
Pease feel free to comment:
Update: 31/1/2023: Thank all for your valuable comments. I make minor amend to No.5 with "concern/allegation" as suggest by SarifahSelinder. Will send out thin noon.
Dear Haniza Abdul Hamid and Board Whistleblowing Committee
IR Contact: HRCPD-Corporate-Affairs@hrc.com.my and Whistleblower@hrc.com.my
Since my last email where I wrote please convey my message to all the employees of HRC, if you come across or have information of malpractice, impropriety, misconduct or omission at the very top level that causes loss to HRC please drop me an email.
I am pleased to receive 3 responses and hence I now instead of waiting till the next AGM for BOD to answer my questions, decided to make this report to HRC in-house Board Whistleblowing Committee.
With reference to HRC WHISTLEBLOWING POLICY
I as a member of the public and HRC minority shareholder would like to raise my genuine concerns , which I believe shows malpractice, impropriety, misconduct or omission at the very high level of decision makers which have cause loss to HRC, and detrimental to the interests of company, employees, minority shareholders and Malaysia tax collection
I henceforth make this official report of such malpractice, impropriety, misconduct or omission to HRC in-house Board Whistleblowing Committee to initiate the whistleblowing process:
The people involve:
1. Mr. Wang YouDe (Chairman, Non-Independent Non–Executive Director)
2. Mr. Wang ZongQuan (Deputy Chairman, Non-Independent Non–Executive Director)
3. Xiang Rui Tao (Manager, Contract & Procurement)
4. Elwin Tan Chun Sian (Chief Financial Officer)
5. Grant Gao Jin Liang (Chief Executive Officer)
6. William Chen Jung Huei (Chief Commercial Officer)
Factual description of malpractice, impropriety, misconduct or omission as follow:
1: Overpaid high crude premium that resulted in average USD 136.45 per barrel in Q3 (HRC is welcome to correct my calculation) when average Dated Brent dropped to USD 101 per barrel in Q3 and thus resulting in Q3 PBT of negative RM 894,141,000
Please investigate is the decision to pay high crude oil premium in Q3 shows malpractice, impropriety, misconduct or omission by people involved in the decision making?
2: From 2021 HRC annual report;
The Company held refining margin swaps designated as hedge.
The contracts are intended to hedge the volatility of the refining margin (differences between purchase price of crude oil and sales price of petroleum products) for a period between 1 to 33 months (2020: 1 to 12 months). Hedge Gross margin per barrel (USD) 8.00 to 12.30
The Company also uses commodity options, commodity swap contracts and refining margin swap contracts to manage its commodity price risk and inventory holding cost. The Company does not designate these derivatives as hedging instruments.
The Company also uses commodity options, commodity swap contracts and refining margin swap contracts to manage its commodity price risk and inventory holding cost. The Company does not designate these derivatives as hedging instruments.
In Q3 why despite all the above hedging the company suffered other operating losses: RM 73,569,000: Fair value loss on derivatives financial instruments: RM 364,570,000, Inventories written down: RM 70,045,000 and refining loss which contributed to Q3 PBT of Negative RM 894,141,000
My genuine concern, it is impossible to suffer hundreds of millions derivative/hedging (refining margin and inventories) loss and at the same time hundreds of millions in physical inventories and refining margin loss.
Please investigate is the decision on refining margin swaps contracts, commodity options and commodity swap contracts in Q3 shows malpractice, impropriety, misconduct or omission by people involved in the decision making?
Note: Petron Malaysia managed to turn Q2 derivatives unrealized loss: RM 166,799,000 to Q3 derivatives realized gain: RM 139,957,000 and unrealized gain RM 7,588,000
3: I refer to my previous complaint dated 4 Jun 2019 address to:
How can a 30 tonnes/day H2 plant cost USD 66.4 million? Below is the budgetary quotation for 7,000 Nm3/hr (15.1 MT/Day) H2 plant from Mahler. Please investigate.
1 Kg of H2 is equal to 11.126 Nm3
7,000 NM3/hr H2 plant = 7X24/11.126 = 15.1 MT/Day H2
So for a 30 MT/Day H2 plant you need 2 x 7000 Nm3/hr plant.
2 units of 7,000 NM3/hr are recommended due to the ability to run only one during low load (Greater Turn-down ratio) instead of one single plant and safety of 2 plants instead of one.
Budgetary 2 X EU 7,250,000= USD 2 x 7,250,000 x 1.12 = USD 16,240,000.
This price is budgetary quotation and still can negotiate for discount (2 identical units) and during detail plant configuration discussion (Pressure requirement thus the compressors spec)
Refer attachment: Technical Specification 4289.pdf
Type of Plant: Hydrogen Generation Plant
With Combustion Air Preheating
Capacity: 7.000 Nm3/h (1,013 bar, 273.15 K)
Purity: min. 99,996 vol.-%
Pressure: 15 bar (abs) exit PSA-unit
46 bar(abs) exit H2-booster compressors
(3x 2.500 Nm³/h, brand Mehrer)
Basis of feed: Natural Gas
My genuine concern is this overpriced H2 plant was awarded without competitive quotation from other suppliers.
Please investigate how many quotations from other suppliers HRC evaluated. Did the contract awarded decision show malpractice, impropriety, misconduct or omission by people involved in the decision making?
4: I received anonymity sender with two invoices as per attachment and I quote his message, “One such instance is the Invoices issued by Hengyuan International Sdn Bhd (HISB) to HRC (Invoices INV-20080 & INV-20081 dated 26/6/2020) with regards to SBM & PLEM projects occurred in Q2 2020. INV-20080 was issued to the amount of RM 1,000,000.00. It was justified with 1104 total manhours. Meanwhile INV-20081 was issued to the amount of over RM 1.6 million which charged from claimed 1800 manhours. The invoices were issued with just 1 page justification with no breakdowns of the costs and NO REPORTS were submitted or reviewed. The invoices were reviewed and commented by the Technical Team to be too excessive but with no impact.” unquote
Please verified the authentic of the two invoices and if the invoices are genuine then this is a clear case of malpractice, impropriety, misconduct or omission by people involved as common payment standard should required payment invoice must has client PO number with reference to service or products supplier S&P signed contract with mutually agreed prices, supply scope, performance specification, penalty for non performance, payment terms/conditions and etc.
Note: Without a client PO, it can only mean no competitive quotations/tendering calling, price, supply scope, performance specification, penalty for non performance, payment terms/conditions and etc negotiation, contract official signing and purchase order issued to supplier.
5: The anonymity sender also expressed his concern/allegation and I quote, “For a more recent example, the newly completed E4M projects are currently in operation even without the issuance of CCC from local authorities. It was declared to be completed and ready to be commissioned even before BOMBA certificate was issued to HRC. If people are to look deeper into E4M project, a lot more questionable practices occurred including the takeover of the project from the original EPC contractor to HQC which happened without proper due diligence. Also recently is the payment request by HISB to HRC which involves multimillion ringgit as payment for the so-called experts dispatched from Hengyuan Headquarters to “assist” in the project commissioning. In reality the “experts” are just young engineers sent without clear objectives and far away from assisting the commissioning of the project. Refer to HYSH press release http://es.hyshjt.com/show-14-103-1.html. The best part was that for each person, HYSH/HISB charged HRC more than 200 USD per hour for the whole duration they are at site” unquote
Again please verify the authenticity of above concern/allegation and if proved genuine then this is something bigger than malpractice, impropriety, misconduct or omission by the people involved but allowing a systematic failure to go on unchecked.
6: I received an email from an ex-employee and a whistleblower: I quote her email, “Hi, I am one of the victims of the HRC whistleblower. I am an ex-staff of HRC, I left October 2022 after they payout my contract employment.
I did 2 whistle-blows with SOLID evidence yet, the whistleblowing committee says there is nothing wrong.
The 2 whistle-blows were:
1) Clear case of Procurement Manager "pre screening" potential suppliers and denied fair competition to other capable suppliers;
2) Clear case of Procurement Manager instructed me to "proceed" telling the supplier to go ahead without PO issued. He clearly knows the last signatory has not signed (in SAP) yet. No mandate was given to him from the last signatory too. When I brought up this non-compliance to the tender secretary and risk manager, I was interrogated like an offender”
As said, I have all "solid" evidence, at first I planned to proceed to SC myself, but since I found out about your articles, I wonder how we could align on this.
FYI, the procurement manager is a Chinese PRC, that explained the immunity.
During the "investigation" he even told one of my Team Leader that "he is untouchable".
Other than that, I also raised 6 offences he did, including sexual harassment to HR, but HR paid out the remaining of my contract in return of me to drop the 6 offences.” unquote
Please verify the authentic of above claim and if proven genuine then beside a clear case of malpractice, impropriety, misconduct or omission by the people involved, I have my serious/greatest concern Chair of Board Whistleblowing Committee Liang Kok Siang (Independent Non-Executive Director) impartiality and lack of commitment in protecting the whistleblower and in finding the root causes of the non-compliance and recommending immediate remedies and prevention measures.
Will the Chair of Board Whistleblowing Committee Liang Kok Siang kindly forward me a copy of the committee finding on the above case?
Please give me an indicating timeline when The Board Whistleblowing Committee will deliberate and decide on the party to conduct the investigation (whether internal or external investigator) and when will I be notified on the outcome of the completion of the whistleblowing process.
Thank you
Best Regards,
Lee Soon Sheng
PS: I quote the below HRC WHISTLEBLOWING POLICY
The Board Whistleblowing Committee will deliberate and decide on the party to conduct the investigation (whether internal or external investigator)
The whistleblower will be notified on the outcome of his/her disclosure within 7 days from the completion of the whistleblowing process.
Any disclosure made herein should contain the following information: -
(i) factual description of the improper conduct;
(ii) the people involved (and whether they are employees of HRC or third parties);
(iii) the relevant dates of occurrence;
(iv) particulars of witnesses, if any; and
(v) documentary evidence, if any
(i) factual description of the improper conduct;
(ii) the people involved (and whether they are employees of HRC or third parties);
(iii) the relevant dates of occurrence;
(iv) particulars of witnesses, if any; and
(v) documentary evidence, if any
A whistleblower will be accorded (to the extent reasonably practicable) with:
(i) protection of confidentiality of identity; and
(ii) internally will be protected against any adverse and detrimental actions for disclosing any improper conduct committed or about to be committed provided that the disclosure is made in good faith based on reasonable grounds.
Such protection is accorded even if the investigation later reveals that the whistleblower is mistaken as to the facts and the rules and procedures involved.
Any disclosure which is found to be frivolous or vexatious will not be entertained
(i) protection of confidentiality of identity; and
(ii) internally will be protected against any adverse and detrimental actions for disclosing any improper conduct committed or about to be committed provided that the disclosure is made in good faith based on reasonable grounds.
Such protection is accorded even if the investigation later reveals that the whistleblower is mistaken as to the facts and the rules and procedures involved.
Any disclosure which is found to be frivolous or vexatious will not be entertained
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Discussions
4 people like this. Showing 50 of 134 comments
So I took the same path around their Internal Whistleblower Dept then swing to..........
2023-02-03 08:50
Bursa listing requirement/regulation (Breach of disclosure of information offence)
SC Capital Markets and Services Act 2007 (Breaches of fiduciary duties of directors and accounting fraud)
2023-02-03 08:53
Right, but SC is not the first stop to initiate the issues.....they only follow up on the crimes being committed.
Try MACC.....might have a long queue.
2023-02-03 09:00
A-G is directly appointed by the PM and given absolute power under Article 145(3) at his discretion to institute, conduct or discontinue any proceedings for an offence.
SO AG decided to compound SERBA instead of institute prosecution in court of law.
2023-02-03 09:18
Dear Sir,
Reference is made to your e-mail on the above matter.
We have escalated the complaint to our line department concerned for their further action. The assessment into the matter you highlighted may take time, depending on the complexity of the issues raised. However, we will undertake the necessary actions to ensure that your complaint is looked into accordingly and will take the necessary enforcement actions if there is any breach of Listing Requirements.
As we do not play the role of ombudsman nor do we conduct arbitration, in the event of conflicts or financial losses, the aggrieved parties need to file the claims through the appropriate legal process in court.
We will also make the necessary referral to other relevant authorities should we come across any potential breaches of other regulations / Acts (other than the Listing Requirements).
Thank you and have a good day.
Bursa 2U
Bursa Malaysia Berhad
2023-02-03 09:29
I am not so smart and bright so may I ask if I am not mistaken there are thounsands of road accidents everyday so whose responsibility to report road accident?
2023-02-03 10:10
Yes Hengyuan corporate governance is terrible loh!
Sc should quickly investigate b4 kon mike , kon the naive investors loh!
Posted by Sslee > 1 hour ago | Report Abuse
Please ascertain has the above acts if proven genuine violated the following Malaysia’s Law and actions should be taken by the related authorities:
1. Bursa listing requirement/regulation (Breach of disclosure of information offence)
2. Capital Markets and Services Act 2007 (Breaches of fiduciary duties of directors and accounting fraud)
3. Company Act 2016
4. Anti-Corruption Commission Act 2009
5. Anti-money laundering Act 2020
6. Anti sexual harassment Act 2022
7. Whistleblower Protection Act 2010.
2023-02-03 11:01
Dear Mr. Lee,
Thank you for including MSWG in the loop for your whistleblowing process.
As MSWG is not a Regulator, no investigation or enforcement will be carried out by us. However, we will take note of the highlighted issues and raise the relevant questions at their next AGM.
Thank you.
Regards
Complaint Unit
2023-02-03 11:47
Sslee where got certain...sslee propositions are all if, assumptions, uncertainty, rumors and wild accusations....fight the wrong battle.
2023-02-03 11:55
Thats why sifu sslee urge authority to investigate loh!
Posted by qqq47660 > 14 seconds ago | Report Abuse
Sslee where got certain...sslee propositions are all if, assumptions, uncertainty, rumors and wild accusations....fight the wrong battle.
2023-02-03 11:56
Our sifu sslee is a good samaritan fighting very hard for justice & fairness for all of us loh!
Posted by Sslee > 5 minutes ago | Report Abuse
Dear Mr. Lee,
Thank you for including MSWG in the loop for your whistleblowing process.
As MSWG is not a Regulator, no investigation or enforcement will be carried out by us. However, we will take note of the highlighted issues and raise the relevant questions at their next AGM.
Thank you.
Regards
Complaint Unit
2023-02-03 11:57
Put it crudely , this sslee is an attention seeker,, trouble maker, and one day will find himself in trouble.
2023-02-03 11:57
Good to seek justice but what about justice for HY, for current shareholders of hy?
2023-02-03 11:59
My main take away is not on promoting INSAS but promoting shareholders activism: Shareholder activism is not a privilege - it is a right and a responsibility. When we invest in a company, we own part of that company and we are partly responsible for how that company progresses. If we believe there is something going wrong with the company, then we, as shareholders, must become active and vocal- Mark Mobius.
I admire Jack Ma priority “Customer first, Employees second and Shareholder third”.
Without customer there will be no sales. Without employees there will be no product for sales. Without shareholders fund there will be no capital to employ employees to make product. Or in other words as long as customers is happy (Buy more), employees is happy (produce more efficiently) then for sure business will grow and shareholder will enjoy the dividend/share price appreciation and proud to be part owner of such a wonderful company. (Ask Jonny English to explain what a wonderful company is?)
But in Malaysia I am very sad that some of the CEO of public companies are self serving in dipping their hand into the cookies jar, treating the company as their own private piggy bank and their priority is Me first, Me second and Me third.
Nothing destroy the share value of the company faster than a self serving or a conman CEO and many people lose his/her life saving and some even commit suicide because of insider con job/scam. The conman/scammer get away with murder because good man do nothing until when the victim is his own family member or close friends then only they regret not doing something to stop or expose the scam.
We as minority shareholders are perfectly capable and able to stop it before it happen if we just care to attend AGM ask the hard questions and hold the BOD and external auditor accountable. Follow up and report any irregularities/red flags to SC/Bursa.
Do not live a life of regret, remorse and guilt like spider man (Peter Parker) due to his selfish misjudgment and let go a robber that he can easily caught, who later turn up as murderer of his Uncle Ben. Knowledge is power and with great power come great responsibility.
I would like to thank the organizer for giving me the opportunity to share my presentation with you. I’m grateful to i3 bloggers and commentators for sharing their knowledge in i3 because Knowledge, if kept to your-self, has no value. Only by sharing, we create the value. Let’s build a community of Giant Redwoods in i3 where we support and hold up each other.
2023-02-03 12:02
Kon mike action very worse loh!
He know Hengyuan kon......but he promote buy to innocent naive...I3 investor loh!
kon man mike action is despicable loh!
Posted by Mikecyc > 2 minutes ago | Report Abuse
Haha same same as in Xinquin… Kon artist sslleee is promoted … even he knew is under Accounting Fraud… until delisted… said in 2 forums that he did not sell as worry if sold to those cannot afford …
Later what he did is also wrote to BOD lah … SC lah .. etc etc .. what a Pretender like Bit ch widow Moneymaker…
2023-02-03 12:06
The flight to moon involved going round the earth to build up speed before you can take off to the moon.
My aim is not to win the battle but to win the war. And that war can only be won by more and more minority shareholders exercise their rights to hold BOD and management responsible, accountable and answerable.
I am eager to see how HRC talk the talk and walk the walk on their whistleblowing policy.
2023-02-03 12:26
It's called Orbital Trajectory targeting........too scientific for my shallow mind.
2023-02-03 13:00
@BobAxelrod,
Thanks for the clarification.
By the way don't be too serious, I just try to pull your leg.
2023-02-03 14:03
want play then play fair.. play belakang mari 1. ppl sure not happy. no follow the bursa rule to play.
2023-02-03 15:22
sslee...........................
Adani Implosion Threatens Broader Blow to Indian Markets...................people write short reports can cause shares to collapse................. your short reports can do what?
2023-02-03 22:22
qqq3,
My report is not a short report for shorting purpose but a report in good faith for common good of company, employees and minority shareholders.
No way HRC made such a huge losss in Q3 when all the other refineries were making profit.
2023-02-04 08:14
According to qqq3 Q3 result is unaudit hence in Q4 all the mistery loss will become Q4 .........
But unfortunately for those call warrants holders it come too late.
2023-02-04 09:41
By the way, I sold all my HRC and call warrants after Q3 result out and just bought back 500 units to qualify myself as shareholder.
2023-02-04 09:43
102796276 01/11/2022 Brought Forward 20,000 4.3065
102947637 02/11/2022 Sell 2,000 4.9000
102947728 02/11/2022 Sell 1,000 4.9100
102947939 02/11/2022 Sell 1,000 4.9200
102947952 02/11/2022 Sell 1,000 4.9300
102948031 02/11/2022 Sell 1,000 4.9400
102948088 02/11/2022 Sell 1,000 4.9500
103056572 17/11/2022 Buy 10,000 4.4000
103056790 17/11/2022 Buy 2,000 4.3800
103092838 22/11/2022 Buy 4,000 4.4100
103108751 23/11/2022 Buy 2,000 4.4600
103136387 25/11/2022 Buy 2,000 4.5700
103136452 25/11/2022 Buy 3,000 4.5600
103136541 25/11/2022 Buy 2,000 4.5300
103139072 25/11/2022 Buy 2,000 4.5200
103139670 25/11/2022 Buy 2,500 4.5100
103140459 25/11/2022 Buy 2,500 4.5100
103153030 29/11/2022 Buy 2,000 4.5400
103160130 29/11/2022 Buy 3,000 4.5500
103161718 30/11/2022 Sell 10,000 3.7200
103161758 30/11/2022 Sell 10,000 3.7500
103162653 30/11/2022 Sell 5,000 3.6100
103163740 30/11/2022 Sell 5,000 3.7200
103164062 30/11/2022 Sell 5,000 3.7200
103164198 30/11/2022 Sell 5,000 3.7300
103165315 30/11/2022 Sell 5,000 3.6900
103165607 30/11/2022 Sell 5,000 3.7000
103174389 30/11/2022 Buy 500 3.5700
103892766 01/12/2022 Brought Forward 500 3.5700
2023-02-04 09:45
Time is very precious. Don’t waste your time in HRC. Shareholders you can fight HRC management FOR FUN ONLY.
2023-02-06 09:09
Good morning I3lurker, you are most welcome with an open arm.
So tell me with listed company you want me to disturb next?
2023-02-08 08:31
https://www.insas.net/ar-gm.html
Insas AGM key matters discussed make an interesting reading.
2023-02-08 08:56
Y.A.M. Tengku Aishah, Dato’ Wong and Dato’ Dr Tan have declared that they are not persons acting in concert with Dato’ Sri Thong Kok Khee.
2023-02-08 09:00
Sslee,
Should forget about HRC and just concentrate on Insas, Inari and SYF loh!
Art of stop wasting time & effort mah!
2023-02-11 10:10
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Sslee
Actually the flight path to moon is fly around earth then swing to the moon. The return trip also fly around moon then swing back to earth.
2023-02-03 08:49