PETALING JAYA: The suspension of three senior Human Resource Development Corporation (HRD Corp) officials is a necessary step towards strengthening governance and restoring confidence in the management of employer levy funds, say anti-graft activists.
They also said the drastic action taken by HRD Corp reflects an acknowledgement that the issues raised against its top officials are serious and cannot be treated as routine administrative lapses.
Malaysia Corruption Watch (MCW) president Jais Abdul Karim called for a comprehensive forensic investigation and greater transparency to ensure accountability, safeguard statutory trust monies and reinforce oversight at all levels of the organisation.
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“Employer levies collected by HRD Corp are statutory trust funds, not corporate surplus. These monies are compulsorily paid by employers for a narrowly defined purpose: workforce training and skills development.
“Any diversion of such funds into investment activities outside that mandate constitutes a grave breach of fiduciary duty, governance failure, and potentially criminal misconduct,” he said when contacted.
He said while concerns regarding the use of levy funds for investments were raised publicly two years ago, including through parliamentary oversight mechanisms, no decisive action had been taken.
“It is telling that firm action was only initiated after a new Human Resources Minister (Datuk Seri R Ramanan) assumed office approximately two months ago, followed by the appointment of a new CEO (Datuk Mohamed Shamir Abdul Aziz) just last week.
“MCW credits Ramanan and the newly appointed CEO for demonstrating the political will and executive resolve that had been conspicuously absent until now,” he added.
However, administrative suspension alone cannot substitute for accountability, he said.
“A full forensic investigation must be pursued to determine who authorised the investment decisions and under what legal basis,” he said, adding that there should also be a probe on whether internal controls were overridden or ignored.
He said the investigation must also look into whether conflicts of interest, misrepresentation, or negligence had occurred and whether levy funds were exposed to financial loss or unlawful risk.
“Accountability must extend beyond management to include board-level oversight and ministerial governance responsibility, where applicable. In statutory bodies, systemic failure is never the product of a single individual.
“We call for full public disclosure of investigation findings, independent enforcement action where warranted, institutional reforms, and restitution if losses are established,” he said.
In an interview with The Star recently, Ramanan said the HRD Corp is set to go through a major restructuring exercise which includes a refresh of its board and a review of 7,000 training providers.
Among new appointments to the HRD Corp board are International Centre for Education in Islamic Finance University President & CEO Proffesor Emeritus Datuk Dr Mohd Azmi Omar, former Cooperatives Commission of Malaysia CEO Datuk Rusli Jaafar and Mydin Managing Director Datuk Ameer Ali Mydin Mohamed.
Centre to Combat Corruption and Cronyism (C4) chief executive officer Pushpan Murugiah commended the HRD Corp for its swift action, but said suspension should be seen only as an interim measure instead of a solution.
“This matter has accumulated over several years and across multiple leadership changes.
“It therefore raises questions not only about individual conduct, but also about deeper systemic governance weaknesses that allowed these practices to persist,” he added.
Pushpan also said that beyond taking action against its staff members, HRD Corp requires structural and governance reforms.
“There must be clear statutory and operational boundaries to ensure that levy funds are used strictly for their intended purpose – workforce training and skills development – and not treated as discretionary investment capital.
“Transparency and oversight must also be strengthened, including stronger board accountability, clearer reporting to Parliament, and proactive disclosure of how levy funds are managed and deployed,” he said.
Malaysian Employers Federation president Datuk Dr Syed Hussain Syed Husman said the suspension reflected an adherence to the government’s call for the civil service to ensure good governance.
“What HRD Corp is doing is to put in place good governance and bring in values of integrity, honesty, transparency and fairness,” he added.
