KUALA LUMPUR (July 6): The Public Accounts Committee’s (PAC) inquiry into the affairs of the Human Resource Development Corporation (HRD Corp), particularly its investments and governance structure, has opened a can of worms.

HRD Corp, which celebrated its 30th anniversary last year, was formed in 1993 to fund the upskilling of employees on the basis that companies were not spending enough to develop their human capital. In relation to the objective, the government agency began collecting from registered employers a 1% levy on Malaysian employees’ monthly wages across the sectors covered by Pembangunan Sumber Manusia Bhd (PSMB).

Over the years, the collection of the levy expanded into the wider economic sector, and consequently, the annual amount collected ballooned. The fear now is that the government agency, which is flush with cash, has become a breeding ground for investments that may not be viable.

This is evident from the PAC’s findings that a significant amount of the levy collected has been put into risky investments related to the equity market. It highlighted the put and call options that HRD Corp had entered into in its investments related to equities.

The government agency’s investments went up a significant 66% to RM1.44 billion last year from RM869.7 million in 2022. The fair value of its equity investments stood at RM612.77 million compared with RM352.47 million the year before.

The findings have drawn the attention of Prime Minister Datuk Seri Anwar Ibrahim, who called for priority to be given to management, governance and accountability in the issues raised by the latest Auditor General’s Report.

After the Ministry of Human Resources submitted a report on the mismanagement issue involving HRD Corp to the Malaysian Anti-Corruption Commission on Friday, the anti-graft agency said it would examine all the documents related to the findings in the latest AG Report concerning HRD Corp to determine if there had been any element of wrongdoing.

In an accompanying story, we also highlighted three items in HRD Corp’s accounts that have raised eyebrows, namely renovations, investment in derivatives, and the ballooning operating expenses.

Read on to find out new revelations that are coming to light as the probe deepens. 

https://www.theedgemarkets.com/node/718110