THE Tunku Abdul Rahman University College (TAR UC) issue has now become the interest of national debate with many versions and much spin surrounding the funding, or rather the renouncement of funding, for this institution which was established way back on Feb 24,1969, as a non-profit, private university college in Malaysia.
One must be familiar with history to comprehend that TAR UC was founded with the purest intentions by MCA: to provide affordable tertiary education to those from average and lower income Chinese families who fell outside of the quota system to get into local public universities but could not afford to send their children overseas.
Currently, the hottest issue plaguing this prestigious institution is that TAR UC sits on an astounding cash reserve valued at about RM634mil and MCA is making hay by asking for a government grant and public donations. At the party’s annual general meeting on Nov 30, the chairman of the TAR UC board of governors, Datuk Seri Liow Tiong Lai, held a special briefing to explain the TAR UC issue and all allegations, including the cash reserves, as well as its ownership.
Let me address the cash reserve issue. Yes, TAR UC has a healthy cash reserve but this was built up through 50 years of prudent management and investment by the board of trustees of the TAR UC Education Foundation and TAR UC’s board of governors. In the 1970s, TAR UC started annual fund raising exercises to seek money for buildings and campus expansions, and these public donations, including from eminent philanthropists, were carefully safeguarded and invested by TAR UC to grow into a nest egg that is a healthy RM634mil cash reserve today.
So what if TAR UC has hundreds of million in cash? How many universities in Malaysia, public or private, can boast of such fine management that created such healthy finances? And this mustbe emphasised: This healthy reserve was built up even while TAR UC consistently maintained affordable education for ALL. To borrow the AirAsia tagline, thanks to TAR UC, “Now everyone can get a higher education”.
TAR UC management, with commendable foresight, built on this cash reserve over the past 50 years with the objective of using it to fund expansion. These are the funds into which the institution would dip when it needed to add new buildings to expand campus capacity or even build new campuses. TAR UC needs the flexibility provided by this financial capacity to expand whenever the need arises and not have to hold off on expansion plans.
And let us all not forget that TAR UC is a private institution and, unlike public universities, does not have the luxury of government hand-outs or assistance when it comes to expansion or upgrading.
As a private institution that is still on a quest to become a world class research university, TAR UC has much to upgrade not only in terms of hardware (buildings/facilities/equipment) but also its software (human capital), and needless to say, all of this costs money. A lot of money. In fact, the RM634mil reserve pales significantly in comparison with the amount required in reality to develop a prestigious research university of the same ilk as blue bloods like America’s Massachusetts Institute of Technology (MIT). To attract world class researchers and fund frontline, ground-breaking research, TAR UC must have money, and lots of it.
Additionally, this cash reserve also ensures TAR UC’s ability to continue as a business entity under adverse conditions. As trustee Tan Sri Lau Yin Pin puts it, the management needs over RM100mil a year to pay staff salaries alone at the university. TAR UC’s operating expenditure has been increasing exponentially annually, rising from RM140.3mil in 2013 to RM232mil in 2018.
As a registered business under the Companies Act 1965, TAR UC is regulated by the Companies Commission of Malaysia (SSM). In fact, besides being regulated by the SSM, TAR UC is also closely regulated by the Education Ministry and the Domestic Trade and Consumer Affairs Ministry as well as the Finance Ministry. In fact, TAR UC is much more heavily scrutinised by government agencies and ministries than any other university in Malaysia. What’s more, its accounts are audited to international accounting standards annually and submitted to SSM without fail, which is mandatory, in fact.
Yet, somehow, ignorance seems to prevail and there is much false perception that MCA can dip into the TAR UC Education Foundation’s fund whenever it needs to. This is mere political spin, as the foundation’s money can only be used by TAR UC for its operational and developmental needs. This money cannot be, say, distributed among MCA members, even if the TAR UC board of governors decides to close down the institution. This is because, under the TAR UC charter, the institution may only be transferred to another party approved by government, and specifically approved by the Inland Revenue Board.
It is highly unusual that TAR UC is now subject to so much political scrutiny when it had been so strictly regulated previously and even more so now with the change in the administrative regime. For those who don’t know, TAR UC’s 14-member board of governors includes five representatives from the government, specifically from the Finance and Education Ministry, serving as watchdogs in the government’s interest.
Apart from these five government appointees to the the board of governors – which sees to day-to-day operations and its management – there are also two independent members on the board, namely the president of the Federation of the TARC Alumni Associations and the president of the Tarcian Alumni Association; these two people serve as watchdogs in the institution’s interest. Let me point out here that the Tarcian Alumni Association representative is none other than Datuk Yap Kuok Fong, whose NGO was given a RM40mil allocation by the government for political reasons.
Given this eminent panel of custodians, if at all there was any mismanagement or any failure in the duty of its members to exercise prudent discretion in all decisions and undertakings when it comes to TAR UC’s operations, as well as in the expenditure of the hotly contentious matching grant received from the government annually, then I am certain every single person on this 14-member board would have been called to task and held to account, including those from the two ministries and Datuk Yap as well.
Therefore, if there was any issue with TAR UC’s management for the past 50 years, these government representatives would have highlighted it. Yet, when TAR UC continued to receive its matching grant under the previous government, there was no undue concern or objection from the government representatives. Furthermore it is rather exemplary how financially meticulous the members of the board of governors were in the past years, so much so that TAR UC managed to accrue a nest egg for impending future expansions plans.
So let’s all stop denying the fact that yes, MCA with great foresight founded TAR UC for Malaysians from the lower income group; and yes, MCA was also astute and shrewd enough to place the running and management of TAR UC into the hands of professionals, building it up from that one red brick building into the academically prestigious and highly acclaimed tertiary institution it is today.
Yes, indeed, TAR UC has come a long way from being a mere college existing with classrooms on loan from other schools to growing into a prestigious university college that today can boasts five campuses dotting the country, including in Sabah.
It is rather disheartening how this matching grant issue has now become a political pawn in Finance Minister Lim Guan Eng’s personal quest to get one up on MCA. And to browbeat the matter further, the government – or rather, Lim – has now reportedly provided RM40mil to TAR UC through the Tarcian Alumni Association conditioned on MCA “letting go” of TAR UC. What is the distinction between “matching grant” from the government and Lim’s recent RM40mil allocation to the association? Money is money right, you may say.
Let me explain why the RM40mil allocation is not the same as matching grant. Originally, the TAR College’s matching grant was stated in a special instrument of government presented by then Education Minister Tun Hussein Onn to Parliament on Aug 22,1972, to commit to the government’s “dollar for dollar” support for TAR College to realise and deliver affordable education to all Malaysians.
When TAR College was upgraded to a university college in 2013, the Cabinet committed to giving the institution up to a maximum of RM60mil as endorsed by the Federal government via its Cabinet meeting on Dec 5,2012, and the special instrument presented in 1972 was revoked thereafter.
Therefore, TAR UC’s matching grant is a legally binding contract by the government to aid the institution directly, and for the past five decades, TAR UC had received RM1.353bil grants in total, the last being a RM30mil allocation provided in Budget 2018 – but the matching grant subsequently was withheld by Lim when the new government took over Putrajaya.
Since then, Lim, as Finance Minister, has played political football with the lives of 28,000 students nationwide by totally cutting off the grant for operational expenditure and slashing development expenditure to RM5.5mil under Budget 2019 and to RM1mil in Budget 2020.
By law, any financial aid to TAR UC – whether in the form of a matching grant or even an allocation – must be given directly to TAR UC and not through a third party even if that third party is established as a foundation for TAR UC’s welfare. The government, above all, should not be seen as making a “backdoor reverse takeover” of TAR UC through an NGO or foundation because it cannot use the TAR UC name, acronym and logo, which are the registered trademarks of its owners. It is so wrong for the government to portray its new foundation as representative of TAR UC to take over the role of its legal owners, more so when the owners have registered their trademark. Where is the government’s respect for copyright and intellectual property rights. Futhermore, its current action has sowed confusion among the people.
TAR UC is accountable for every sen of matching grant that it receives directly from the government, which will be reflected in its accounts. Even if TAR UC receives the RM40mil from the Tarcian Alumni Association, the accounting treatment now would reflect an NGO donation for which the TAR Education Foundation may issue a tax-exemption receipt. But whether or not the Tarcian Alumni Association will make this donation to TAR UC remains to be seen, hence the public must vigilantly hold the association and Lim accountable for this RM40mil out-of-budget allocation from taxpayers.
Invariably, TAR UC’s predicament in making ends meet remains unresolved. In short, the contractual obligation of the Federal government to TAR UC remains unfulfilled.
The distortion and melodramatisation of the whole TAR UC palaver by the Finance Minister has somewhat irked the common people – so much so even petty traders are now raising funds for TAR UC. And this dissent has somewhat translated into the dire defeat of the Pakatan Harapan government in the recent Tanjung Piai by-election in Johor.
The affordable and quality tertiary education provided by the prestigious TAR UC is undeniable. So why is Lim bending over backwards trying to “fix” something that is not broken? As the former Speaker of the US House of Representative Samuel Rayburn once said, “Any jackass can kick down a barn but it takes a good carpenter to build one”.
DR PAMELA YONG
Deputy Chairman, Institute of Strategic Analysis and Policy Research (Insap)
Note: Insap, established in 1986, is one of the pioneer think-tanks in Malaysia, and focuses on political-economic research.
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