Photo by Patrick Goh/The Edge

KUALA LUMPUR (July 16): The Human Resource Development Corp (HRD Corp) has threatened to take legal action against The Edge Communications Sdn Bhd and one of its writers for alleged defamation over reporting on the findings of the Public Accounts Committee (PAC) and the auditor general about the agency.

In a letter of demand sent on its behalf by the law firm Amrit & Company, HRD Corp accused the media company of having "unfairly, deliberately, maliciously, recklessly published and in bad faith (malice) misquoted, sensationalised and misinterpreted the findings made by the National Audit Department" in two of its articles, which carried the headlines: 'PAC flags dubious property deals by HRD Corp', and 'Frankly Speaking: Total breach of governance at HRD Corp'.

In the first article published on July 4, The Edge reported that the PAC had flagged several dubious property deals at HRD Corp, including the purchase of a RM154 million building without the approval of its board. The article quoted the PAC's report on the same day about the matter.

It also quoted PAC chairperson Datuk Mas Ermieyati Samsudin as saying that there had not been a consistent procedural standard process for the approval of property acquisitions by HRD Corp, and that HRD Corp's board of directors was not given the complete documents for some property purchase transactions.

The second article, published in The Edge Malaysia weekly for the week of July 8 to 14, discussed how HRD Corp had come under scrutiny for questionable investments and property purchases, based on the findings and conclusions of both the PAC and the AG, and what some of those transactions involved.

HRD Corp, in its letter of demand, claimed the articles were designed to malign the agency and its officials, and that they had exposed HRD Corp and its officials and employees to "odium, ridicule, contempt and public scandal which has undoubtedly tarnished the professional reputation of HRD Corp" and its appointed officials and employees.

It said the articles suggested that HRD Corp had failed its audit, mishandled its funds, made decisions that did not follow procedures, and did not protect its own interests to achieve its objectives.

"Our client states that the impugned statements (reports) are false, misguided and misleading," the law firm said, adding that the reports were made without verification with HRD Corp.

HRD Corp claimed that it never failed its audit, mishandled its funds, or breached any procedures in safeguarding its investments and objectives.

It said all its investments were undertaken by its investment panel in accordance with the Human Resources Development Fund Act 2001, and that they were documented and recorded in accordance with standard required procedures and good governance. It also said its investment panel is not duty bound to report its investment decisions to the board of directors, that it had not breached any rules of governance, and that it does not engage in criminal and/or corrupt practices.

"Bank Negara Malaysia had through a letter dated July 12, 2010 decided to withdraw its representative from HRD Corp’s investment panel...HRD Corp did not breach any rules of governance in relation to its investments. Section 50 of the Human Resources Development Fund Act 2001 provides that HRD Corp can refer to the minister in charge for matters pertaining to investments," the agency said.

HRD Corp wants the articles to be removed, and a formal written apology to be published in two English dailies and The Edge's own website within 48 hours of the date of the letter. It also wants damages for the alleged grievances it claimed it suffered.

The Edge, meanwhile, stands by its articles that quoted the findings of the PAC and the AG, and will vigorously defend any suits that HRD Corp may file against it, said The Edge Media Group chief executive officer and publisher Datuk Ho Kay Tat, adding that issues surrounding HRD Corp are of public interest as they involve money belonging to employers and employees of the country.