Relevance

relevance definition: the degree to which something is related or useful to what is happening or being talked about.

I believe that from time to time one's publicist or media agent ensures that one remains relevant...............because if you are not than you are forgotten. Additionally being relevant in today's world can make you big bucks, some are relevant in main stream media others are on the alternative media like instagram. Hence today we have sisters that are continuously in the news and it would seem their relevance is the body shape with certain parts being larger than the norm, than there is the lady that never smiles or there is that *^%# star that offers to have a relationship with soccer players.  

The subject of relevance got me to ask if it is for this type of reasoning that certain corporate leaders need to be always in the news, they are not really concerned whether they court the right kind or the wrong kind of news, as long as they are in the news!

Since relevance is of concern, i still want to know;

1. That big discount received on the tax, how was that accounted for in the accounts was it treated as income, or was it treated as a creditor and after two years handed over to the authorities under the unclaimed money act.

2. It was reported that there were shenanigans in the sister company's procurement system, a police report was lodged, we are told, what is the status?

3. Is there an update with regards to your travel status, are you welcomed in all countries of asia and are there some countries that would wish you to visit since they are keen to discuss your business dealings.

4. Would it be premature to congratulate you as the de facto MOT, de facto seem to be another term commonly used in the country, seeing that you are currently making statements on transport infrastructures.

Thank you, looking forward to your next ranting, but will appreciate your replies, via mainstream media.    

Of Professional Service Providers and Standards of Conduct

Of recent past the auditing fraternity, especially in the UK, has been under intense scrutiny  particularly with regards to their quality of work and their business conduct. Articles have come out in the broadsheets, in some reports it has been suggested that the Big 4 are willing to share their knowledge infrastructure with the Top Ten, probably to thwart the regulators from acting on their stranglehold over their market space.  

Even at home there are growing concerns over their services and the value that auditors give. Recently we came to know that with regards to the audit report of a much talked about state fund, it was not one but two auditors that had retracted their reports. Of course this begs the question as to whether their audits were of so poor quality that they issued reports without satisfying themselves sufficiently. One audit partner told me that the audit files of at least one of these auditors have been with the profession's institute for investigation and that nothing was moving. 

If one is wondering why the AOB has not been involved, again I am told that the AOB had decided that the state fund is not under the sphere of their auditor performance reviews, which I thought strange as performance and standards are performance and standards and the fact that the SC had advocated in their recent MCCG that state and statutory bodies should embrace the MCCG. Furthermore the SC uses the term public interest entities, not plc, so why should not this particular audit not fall under the AOB's purview. 

Concerns therefore about the standards of conduct of these professional service providers are not misplaced. 

Recently the chairman of a big 4 was reported as being made the chairman of the new executive committee of 1MDB and it was reported that this was part of the scope and services. Now if you ask anyone, they would probably scratch their heads and ask how come and probably add "most unusual arrangement, never heard it done before". This begs the question as to how problems will be resolved since the advisory team will be going to one of their own in trying to resolve matters and yet this one of their own must act in the best interest of the company as he is an executive and hence a director! Under any circumstances this is a major conflict of interest. Where would the check and balances that auditors famously like to quote be? 

It reminds me of another instance where similar shenanigans took place, this was at the inception of the AOB. Like all new organisations the AOB needed staff and naturally the profession was tapped. However at the senior level of the AOB, a staff of senior ranking was seconded to the AOB from one of the firms(imagine the laughing emoji here, many of them). Many to this day believe that this was the reason that the firm in question was never hauled up for their non qualification of a glc that lost billions in the middle east. For those interested, the secondee has returned to the mothership and is now a partner earning big money, so who says loss of ethical and moral values does not pay.

Similarly there are those of us waiting for the new BNM Governor to make a statement either endorsing or categorically stating that the professional services firm saying RM7m as a pass through in an account is ok, because if it is, than surely the case against the previous regime for money laundering must be in doubt and it would open up opportunities for another service offering in the financial services industry.

Point: External Auditors must remember that they are people with green pens placing green ticks, they issue reports that are so ring fenced that it is becoming meaningless, they earn a lot of money for this and they should stay satisfied with this opportunity. 

Finally has the MOF and the two SOs thought about this conflict, or have they embraced the philosophy of the previous government: we can also be as arrogant and do as we please, after all we convinced the rakyat to vote us in and as such they will believe us as long as we utter the magic word "1MDB" 

LET'S NOT FORGET THAT PERCEPTION IS 90% OF REALITY.   

The MSW G and Executive Pay.

Executive pay has been the bane of governance for over two  decades. In Malaysia it is not new either and from time to time this becomes a hot issue hitting our front pages.

Two days ago the executive pay of a CEO hit the headlines and for justifiable reasons. The main objectors were institutional investors and the Minority Shareholders Watch Group (MWSG).

Let me be very forthright, my gripe is not with the institutional investors for raising this issue(they have a reason), but more with the MSWG.

As I  said the topic of executive pay is not new, so can the MSWG please provide the following information: 

1. Since their inception how many times have they raised the issue of executive pay on their own, not latching onto the coat tails of others. 

2. Apart from the issue of executive pay, can the MSWG provide instances where they have raised burning issues with regards to governance related matters. I have friends that have labelled the MSWG as a "waste of time" for reasons of their cursory questioning and timidity.

3. Can the MSWG please make a public disclosure on their ownership and funding structure and then provide a list on how many times they raised governance issues in entities that their stakeholders are involved with.

As my friends says, the MSWG is a waste of time, it's like many institutions in Malaysia, nice to have, but when it comes to implementation and enforcement it is a case of hiding under the desk.

PS:

Don't get me wrong, I am all for managing executive pay, but

1. No knee jerk reaction, it must be performance based.

2. Pay international rates even to Malaysians, if need be, if not in future we will continue to complain about the brain drain. 

3. The world has been trying to come to a landing on what is a fair remuneration, but till today cannot do so. Look at the Anglo - Dutch IOC, they made a mistake on the Chairman's remuneration in the early 2000s and the did it again recently. Hence a lot of work and time needs to be put into this area.

4. Finally guys stop attacking the receiver, the culprit are the givers. Its like like when we are caught for a traffic offence, most times its "boleh selesai", its rare that we will accept the summons and pay the fine. After which we complain about our corrupt enforcement agencies.  

In a similar light, why has the Nomination and Remuneration Committee not been taken to task. After all they agreed on the executive package and they were supposedly measuring it and agreeing payment, or was it a case of saving their own seats on the board, so silence was the better route?

So MSWG, do your job, become relevant or else close shop and save your stakeholders the money!  Governance issues are not politics they are factual and many private investors need someone that they can rely on.  

Corporate Malaysia needs an effective watch dog and you are certainly falling very short! 

Que Sera Sera Minister of Finance

It's now coming to approximately two months that a new government has been formed and is in-charge of the country. It's about 3 or 4 years since we first learned about all the shenanigans and the 1MDB saga. More importantly it's the opposition that brought this all to the fore and fought very hard to make the  rakyat aware and to convince us to vote out the incumbents.  

But seriously, how much longer does the MoF and his two cohorts need to continuously keep referring to 1MDB, come on get on with it, stop being a scratched record.  Pause and remind yourself that if there was no 1MDB than you guys will still be the opposition!

On the issue of LRT3, can the Rt Hon Minister of Finance please stop talking %^*&, there is a difference between cost cutting and cost management. 

Cost cutting takes place when you do away with parts of the item or completely doing away with it. Therefore removing stations etc, changes the build scope and that results in the cost cutting/reduction. Wow  the country needed a MOF and two machais to do that, something a 5th former could do and they are mighty proud of it!

On the other had if they had applied cost management techniques, by looking at the Bills of Materials and renegotiated with the suppliers and squeezed them and found more ingenious ways of being more efficient and effective, than there is reason to feel proud and to shout from the top of the hill!

So MOF, lets stop the continuous 1MDB or many little 1MDB, we know that, clean up the mess or the rakyat may just not vote you back.  Get down to work!