KUALA LUMPUR: The National Entrepreneurial Group Economic Fund (Tekun) accumulated losses amounting to RM209.28 million as of 2015, the Parliament was told today.
The losses were brought about by massive debts to the government and a huge amount of bad debts being written off by Tekun.
In the Auditor General’s Report 2016 Series 1 presented to parliament, the management of activities in Tekun was in accordance with the objective of its incorporation but were not properly planned.
“The corporate governance practices are also less than satisfactory,” the report said.
Audit carried out from May to October 2016 and February 2017 found that comprehensive studies were not conducted to evaluate the effectiveness of fund utilisation by entrepreneurs to start or expand their businesses.
The report said: “The performance of repayment compared to target was only between 78.1 per cent and 96.9 per cent.”
As at 30 June 2016, the report stated that Non Performing Finance stood at 38 per cent (RM769.34 million) from the total repayment arrears of RM2.02 billion.
“Total bad debts being written off were RM410.61 million (9.6 per cent) from total financing and collected repayments were only RM74.63 million (18.2 per cent).
“Targeted timeframe and outcome for six Entrepreneur Development Special Programmes were not set.”
The report said Tekun Credit Guarantee Scheme failed to achieve its objective due to lack of response from suppliers.
“Joint Programme Committee for Mentor Mentee Programme was not formed and Programme monthly reports were not submitted by the three mentor companies involved.
“Failure in the implementation of Tekun Entrepreneurship Portal, Tekun Entrepreneur Community Card and Cyber Mall resulted in losses of RM872,035 and members of the Audit, Integrity and Risk Committee did not have accounting background.
Apart from that, the report said corporate governance practices on financial management were not managed properly.
To improve the performance management of the company, the report had recommended for Tekun to conduct a comprehensive study to evaluate the effectiveness of fund utilisation by entrepreneurs and reasons for the failure of their businesses.
Tekun is also required to conduct a feasibility study before execution of a programme and to monitor the programmes to ensure their objectives are achieved as well as ensuring timely repayment.
The report said the audit also revealed that Tekun managed to increase its total financing from RM2.69 billion to RM4.29 billion for 473,982 entrepreneurs within 18 years.