KUALA LUMPUR: A significant portion of money belonging to the Human Resources Development Fund (HRDF) had been misused by several individuals linked to the previous management for their personal gain.
Human Resources Minister M Kulasegaran, in disclosing this, said the money, which amounted to millions of ringgit, were used to buy property as well as pay salaries and hefty bonuses for selected employees.
Commenting on the HRDF's Governance Oversight Committee report on Saturday during a town hall session with employer associations and registered employers here, the minister said that in some instances, these acts were done without the knowledge of the board of directors.
HRDF, formed in 1993 as the Human Resources Development Council, is an agency under the purview of the Ministry of Human Resources. HRDF was given the mandate by the government to catalyse the development of competent local workforce that will contribute to the country’s vision of becoming a high-income economy.
Kulasegaran said while this was the basic foundation of the HRDF’s establishment, the objectives took a backseat
"That has been the basic foundation on which the HRDF was established.
“However, along the way, these requirements and objectives took a backseat, and the fund was diverted to activities which were less impactful to the local workforce.
"It was found that there were some elements of fraud in the use of the fund,” he said.
The minister noted that some members of HRDF’s previous board of directors did not disclose their personal interests to the board.
“We will launch civil and criminal proceedings against them,” he said.
The minister said two police reports were lodged last week on the financial abuse.
“We have lodged police reports but we cannot reveal the details due to legal issues. They (HRDF) have obtained legal advice. Abuse of power and financial abuse did take place and the senior management have lodged police reports after being informed of the developments,” he said.
He also noted that there should not be any finger-pointing, and that it is best to leave the matter to the authorities to investigate.
Meanwhile, he said effective Nov 15, the government will discontinue the 30 percent deduction from the levy contributed by registered employers to the HRDF’s Consolidated Fund.
Kulasegaran said the decision was made after deliberation with the GOC, the HRDF board of directors and its management.
The minister said the final payment towards the Consolidated Fund was for the month of October 2018.
Under the Human Resources Development Bhd Act 2001, registered employers with HRD are required to contribute one percent levy on their employee's monthly salary to the fund, where 30 per cent of the levy are channelled to the Consolidated Fund since 2016 to help train employees from small companies that could not afford to contribute to HRDF and employees from the B40 category.
The minister said although employers were under the impression that their contributions to the Consolidated Fund could not be used to train non-contributors, they have to instead view it as a national service in helping to train good local workforce.
“There are many enterprises which do not have sufficient fund to contribute to the HRDF. Their workforce have to be trained too,” he said.
The Consolidated Fund came into focus when it was exposed in June this year that a large amount of the monies in the fund had been misappropriated by its previous management for things other than its intended purposes.
Meanwhile, HRDF chief executive VE. Elanjelian said HRDF was looking at strategic initiatives to maximise the remaining RM200 million in the Consolidated Fund for the benefit of employees especially from the small and medium enterprises.
“This fund will not be used for expensive programmes. It will be used to subsidise those employees whom otherwise will not have money to go for training or for small companies which do not have fund to train their workers,” he added.