From Malaysiakini
By Syed Jaymal Zahiid
An independent audit company’s probe into the controversy-ridden government tourism development company, Pempena Sdn Bhd, has shown that the company, despite its multi-million ringgit investments, has been performing poorly.
PriceWaterhouseCoopers (PWC) in its report, released to the press today, stated that as of June 2008, Pempena had invested a total of RM54.4 million in 24 companies but only four managed to generate profits.
The independent audit firm in its report also showed that Pempena had invested in five non-functional companies. PWC has proposed the company to pull out of these investments, a move that would incur “a loss of approximately RM20 million”.
The companies mentioned in the report are Malaysia Tourism Executive Sdn Bhd (Matex), Sri Kebaya Restaurant Sdn Bhd, Malaysia Restaurant Hyderabad Limited (Awana Hyderabad), Dalamasa and Nathena.
Another major flop was Pempena’s RM18.3 million investment in luxury taxi project, Executive Taxi Services (Pets), which recorded a profit of just RM369,000 as of June this year.
According to the report, the Pets project has failed to take off and has so far recorded losses of up to RM7.8 million.
PWC, however, believes that the investment could turn profitable should the project be enhanced through proper management and better research.
Another one of Pempena’s investments slammed in the report was the My Destination project, which cost the company RM7.5 million in losses.
No clear or documented investment policies
The report said the project was in a “dormant” state and that “liquidating” the investment would incur a loss of up to RM 6.7 million.
Attributing the company’s poor performance to its decision-making process, PWC’s review showed that the government subsidiary lacked proper “policy and procedure” which could have helped the company generate profits instead of incurring loses.
“Our review shows that there is a lack of investment analysis, critical assessment of the background, credentials and relevant experience of the respective investee companies’ business partners, financial projections and strategic business plans,” read the report.
“(It also lack) considerations of tourism-related initiatives or key performance indexes for most of its investee companies and (proper) documentation which clearly outlines the procedures for operational and financial review of investments.”
PWC was commissioned to do the audit after Malaysiakini published an expose on Pempena.
The report, however, made no mention of the other financial scandals reported by Malaysiakini, such as the RM10 million investment in an e-tourism portal project.
Kit Siang wants more answers
According to DAP stalwart Lim Kit Siang who had obtained the PWC report yesterday from Tourism Minister Azalina Othman in Parliament three weeks ago after persistently demanding for it, information in the report was limited due to the terms imposed on the audit company by the ministry.
“The minister had led the Parliament to believe that it (summary report) is an audit of the various financial scandals of the Pempena group of companies but clearly this important brief was excluded from PWC’s terms of reference,” Lim told a press conference in Parliament today.
He released copies of the report to the media.
He claimed that the report is merely a “high-level business review of selected investments and specifically does not include any investigative audit or forensic work”.
Lim also said that other alleged financial scandals were separately probed by the Tourism Ministry in an internal audit of Pempena.
“Why did Azalina hide the fact from Parliament that there had been an internal audit by the ministry and that it had been completed by Aug 14, 2008?” asked Lim, adding that he would write to Azalina demanding a copy of the ministry’s report.
He further said that he would lodge a police report tomorrow and also urge the Public Accounts Committee to launch an inquiry into the financial scandals of Pempena.
Sue the damn gomen sue the Parliament also, this will likely bring the results from a constitutional and legal “inescapable” stand-point. Its time we reign in the Parliament. Also we need to go international with our news - they either listen to the Rakyat or the international community - least they sell as much as a rambutan overseas.
Biz review is not investigation or audit. I am quite sure PwC only said Pempena’s investments were lousy (based on financial data), reported some facts and make some recommendations which Pempena may or may not follow. Internal audit will not show everything too because of the nature of audit work i.e. not investigation.
It is very difficult to prove fraud if all procedures are adhered to. An experience auditor can vouch that just because procedures are followed, it does not mean there is no fraud. It’s just that fraud has been legalised in some way. For a transaction, some people call it tax evasion (illegal) while some call it tax avoidance (legal).
When will all the leakages end? I want a future for my children and grandchildren.
Dubious act by dubious people will have a dubious outcome. Azalina is not fit for the ministerial post at all.
Do you really think competence is the key issue here? The key issue is to make sure 30% bumi equity is in place… instead of opting for the most competent, the priority number 1 is race, distribution of capital investments amongst shareholders followed by dividion of operational costs. As for profits and competativeness, that can happen later, so long as people have jobs and people pay their taxes..
Malaysia seriously needs to cut the dead wood. Like I have said many times before, more audit needs to take place with priority on GLC’s using credible 3rd party auditors such as Deloitte, Ernst Young, KPMG or P Waterhouse Coopers as these are the globalised benchmarks for accounting and audit standards.. not some willy nilly firm with little credibility.
This is not the only GLC company in Malaysia making losses. There are so many more that will be exposed once a complete review has taken place.
With strong leadership, choosing the most competent CEO’s should be a directive.
Kudos to the CEO of MAS for turning that company around.
-Nasib usahawan Melayu yang ingin maju ke peringkat Global.
(comment sent to limkitsiang blog)
Sri Kebaya Malaysia Restaurant
Doha
Qatar
Sir,
I am writing as an obligation to explain to readers and Malaysian in general. Our vision and intention are crystal clear. Please, after this explanation I hope Malaysian will understand more about the setting up of Sri Kebaya Malaysia Restaurant in Doha.
As much as you and the general public would possibly want to know, Sri Kebaya Malaysia Restaurant is not a subsidiary of Pempena Sdn Bhd. We are a private company with a 30% share by Pempena Sdn Bhd that only amount to RM 150,000.00 (One hundred fifty thousand only). The restaurant had just been opened in January 2008 and we are still in the midst of managing the business setups and direction of the restaurant. We have not even ending our fiscal year. Therefore claiming that the business is a loss venture is obviously untrue. Pricewaterhouse report is also deemed to be incomplete and one sided as we were not even contacted to explain about the business set up.
Pempena Sdn Bhd involvement is also crystal clear, to make the restaurant as a tourism information hub in Doha. Qatar as there has been a rising numbers of tourists from Qatar to Malaysia every year. Currently we don’t have any tourism information centre in Doha. Inevitably to setup information hub will incur more than the share Pempena had invested.
We took the ‘Malaysia Kitchen’ program seriously as a Proud Malaysian. We put ourselves into a lot more business risk and setup a restaurant in a foreign land none other than because of business potential and at the same time supporting tourism industry back home. We are promoting Malaysia through food and hospitality not only to the local Qatari but also to the expatriates. Even without brochures or any information from Motour, we had taken effort to buy coffee table books at our own expense for our customer to read and understand more about Malaysia. Therefore, profit should also be looked upon in a perspective of ‘profit in kind’ whereby local Malaysian will benefit from tourists who visit Malaysia based on our effort!
We are proud to be the first and the one and only Malaysian Restaurant in Qatar.
Being the only Malaysian Restaurant in Doha, Sri Kebaya has also become a centre where Malaysians working in Qatar meet.
We have realized the importance of Sri Kebaya Malaysia Restaurant to be in Doha, Qatar.
As a result to this turmoil and misunderstanding, we have discussed with Pempena to buy back the share. We do not want to be a victim to politic and please do not politicize the issue as that will bring a bad publicity to Sri Kebaya. We have built Sri Kebaya painstakingly and the reputation has been very good with the local Qatari, expatriates, tourists and Malaysians working there. Please do not tarnish our reputation with baseless accusation.
I would also like to take this opportunity to straighten some claims and rumors verbally made and got to our knowledge. Claims that Sri Kebaya is a government subsidized restaurant is not true. Sri Kebaya is a MITI initiated restaurant is not true. Sri Kebaya set up was an awarded grant is not true. Sri Kebaya is Pempena own is not true. Sri Kebaya is Pak Lah crony restaurant is not true. We open Sri Kebaya from our live saving money and bank loan that need to be served. So please set the record straight.
I chose to clarify here not on political reason. It is merely our reputation alone and our voice as a proud Malaysian living oversea could be heard by Malaysians.
I hope this reply will make Malaysian understand more about Sri Kebaya.
Azar Sharif
Director
Sri Kebaya
Doha Qatar
Sri Kebaya Malaysia Restaurant
Doha
Qatar
Sir,
I am writing as an obligation to explain to readers and Malaysian in general. Our vision and intention are crystal clear. Please, after this explanation I hope Malaysian will understand more about the setting up of Sri Kebaya Malaysia Restaurant in Doha.
As much as you and the general public would possibly want to know, Sri Kebaya Malaysia Restaurant is not a subsidiary of Pempena Sdn Bhd. We are a private company with a 30% share by Pempena Sdn Bhd that only amount to RM 150,000.00. The restaurant had just been opened in January 2008 and we are still in the midst of managing the business setups and direction of the restaurant. We have not even ending our fiscal year. Therefore claiming that the business is a loss venture is obviously untrue. Pricewaterhouse report is also deemed to be incomplete and one sided as we were not even contacted to explain about the business set up.
Pempena Sdn Bhd involvement is also crystal clear, to make the restaurant as a tourism information hub in Doha. Qatar as there has been a rising numbers of tourists from Qatar to Malaysia every year. Currently we don’t have any tourism information centre in Doha. Inevitably to setup information hub will incur more than the share Pempena had invested.
We took the ‘Malaysia Kitchen’ program seriously as a Proud Malaysian. We put ourselves into a lot more business risk and setup a restaurant in a foreign land none other than because of business potential and at the same time supporting tourism industry back home. We are promoting Malaysia through food and hospitality not only to the local Qatari but also to the expatriates. Even without brochures or any information from Motour, we had taken effort to buy coffee table books at our own expense for our customer to read and understand more about Malaysia. Therefore, profit should also be looked upon in a perspective of ‘profit in kind’ whereby local Malaysian will benefit from tourists who visit Malaysia based on our effort!
We are proud to be the first and the one and only Malaysian Restaurant in Qatar.
Being the only Malaysian Restaurant in Doha, Sri Kebaya has also become a centre where Malaysians working in Qatar meet.
We have realized the importance of Sri Kebaya Malaysia Restaurant to be in Doha, Qatar.
As a result to this turmoil and misunderstanding, we have discussed with Pempena to buy back the share. We do not want to be a victim to politic and please do not politicize the issue as that will bring a bad publicity to Sri Kebaya. We have built Sri Kebaya painstakingly and the reputation has been very good with the local Qatari, expatriates, tourists and Malaysians working there. Please do not tarnish our reputation with baseless accusation.
I would also like to take this opportunity to straighten some claims and rumors verbally made and got to our knowledge. Claims that Sri Kebaya is a government subsidized restaurant is not true. Sri Kebaya is a MITI initiated restaurant is not true. Sri Kebaya set up was an awarded grant is not true. Sri Kebaya is Pempena own is not true. Sri Kebaya is Pak Lah crony restaurant is not true. We open Sri Kebaya from our live saving money and bank loan that need to be served. So please set the record straight.
I chose to clarify here not on political reason. It is merely our reputation alone and our voice as a proud Malaysian living oversea could be heard by Malaysians.
I hope this reply will make Malaysian understand more about Sri Kebaya.
The Opposition has lodged countless police report but nothing happens. It’s mind boggling when we add up the millions, nay, billions lost in unfruitful ventures. I wonder if Pempena lost due to poor management or plain corruption to make some UMNOputra rich.