PAC: HRD Corp engaged in dubious real estate deals, high-risk investments

KUALA LUMPUR: The Public Accounts Committee (PAC) has found weaknesses in the management of Human Resources Development Corporation (HRD Corp), among them suspicious real estate deals and high-risk investments.

One of the suspicious real estate deals was the purchase of Menara Ikhlas for RM202.5mil in February 2021, where RM120mil was paid upfront as deposit to a company called Crystal Clear Technology.

“It is more than 50% of the purchase price of the building. But, the purchase was eventually cancelled.

“The purchase agreement was a sales and purchase agreement, but the contents of the agreement was a lease to purchase agreement,” said PAC.

HRD Corp chairman Datuk Rajasekharan Ramasamy said the RM120mil deposit was returned with an interest of RM3.2mil.

PAC also zeroed in on the purchase of the RM154mil Bangsar South building which did not obtain the approval of the HRD Corp board.

“Instead, the purchase was made under the purview of the HRD Corp chief executive.

“But due to lack of evidence regarding the purchase of the building, HRD Corp could not ascertain who was responsible for the purchase,” added PAC.

Others were the purchase of the RM16mil Blok A, Sutera Avenue in Kota Kinabalu in Sabah, where the sale was not tabled at the board meeting of HRD Corp.

“The board was asked to sign the Statement of Arm’s Length Transaction without providing full details about the building bought,” said PAC.

Meanwhile, the PAC said the investment panel of HRD Corp failed to report substantial investment activities to its board of directors.

“Besides that, HRD Corp’s investments in the put and call option is considered as high risk,” said PAC.

The PAC also said there was no Bank Negara representative in the investment panel, which is against the Human Resources Development Fund Act 2001.

“Since 2017, there was no Bank Negara representative in the investment panel and this is against the Human Resources Development Fund Act 2001,” said PAC.

The PAC report was released on Thursday (July 4) and more details of the report can be obtained at www.parlimen.gov.my/pac