HRDF officers had a gala time

There was even a ‘windfall’ bonus for some of the executives

Imagine receiving a 3,500% increase in bonus over just three years – besides pocketing astonishing sums in salaries. The ongoing Human Resources Development Fund clean-up also reveals top executives’ pay spiking just before GE14. The board knew nothing about it.

The ongoing clean-up of the abused Human Resources Development Fund revealed that a top executive and three deputies at the fund were lavished with salary increments and bonuses leading up to the last general election.

The four high-ranking officers had allegedly taken their share of a million ringgit “jackpot” at least two months prior to the general election last year.

The scale of the salary increases and bonuses paid out to the officers was staggering.

The executive’s individual bonus of RM616,000 for 2017 was more than triple the bonus received in 2016, which was RM191,000.

To put into perspective, the executive’s 2015 individual bonus package was RM60,000 and only RM17,000 the year before.

The 2017 bonus of RM616,000 translated to a growth of a whopping 3,524% in just three years.

The RM616,000 bonus was part of a package where the four pocketed RM1.25mil in individual performance bonuses for the year 2017.

The three deputies each received RM211,000, and these were on top of the corporate bonuses they received. The issue has been the exponential growth of the bonuses given out although employees of HRDF are entitled to bonuses declared and paid by the fund.

Apart from individual bonuses, employees also received a corporate bonus.

In 2017, the normal staff members of HRDF were only eligible to receive up to 5.75 months of bonus which comprised 1.75 months of corporate bonus and up to four months of individual bonus.

The executive and a deputy have left HRDF while the two remaining deputies are still with the fund. One of them was redesignated but still remains in the upper echelon.

Meanwhile, the executive also received a salary revision twice in 2017, from RM32,000 a month to RM47,000 a month in March and subsequently to RM56,000 a month just four months later.

This translated to a 75% increase in salary within a year.

This was following a “recommendation” by a consultancy firm that was engaged in November 2016 to review the executive’s salary, which was only slightly a year after the previous revision.

This is not the first instance where the board of directors was bypassed in decision-making.

While remunerations and bonuses were usually determined by HRDF’s establishment and benefits committee (EBC) and subject to the board of directors’ approval, the hefty bonus paid was allegedly approved by the Human Resources Minister.

Documents sighted by The Star revealed that Datuk Seri Richard Riot Jaem, who was the minister that time, gave the approval for the performance bonus on Feb 28 last year.

This was also approved by Riot and the EBC was not informed about it.

Under the HRDF Act, a minister may only give directives to the board, and not to bypass the board to give approvals.

In a letter to Riot on Feb 27 to request for the allocation of performance bonus, the HRDF said the board had approved a restructuring in HRDF, which involved more competitive salaries and new grades of service.

“This is to ensure that HRDF can scale greater heights in terms of competitiveness and productivity in assisting the Human Resources Ministry and the government to achieve its strategic goals and targets,” an excerpt from the letter read.It also claimed that a board meeting on Dec 21, 2017, approved for the chief executive to determine the quantum of bonuses for the deputy chief executives and that there should be a separate allocation for them.

The Star in January highlighted the purchase of a RM154mil property in Bangsar South which was done without the approval of the board of directors and investment panel.Approval was given for another property in the same area but HRDF went on to make payments for the Bangsar South property with some RM40mil allegedly paid before the tax invoice date.

The investment panel was only informed of the switch of property purchased five months after the first tranche of RM15.4mil was paid.

In November last year, Human Resources Minister M. Kulasegaran revealed that high-ranking staff members of HRDF misappropriated about RM100mil out of the RM300mil that was in the fund.

He also highlighted several wrongdoings such as abuse of power, criminal breach of trust and arriving at decisions without reporting to the board of directors.

HRDF is an agency under the Human Resources Ministry, which manages a fund comprising contributions from employers for the purpose of training and development.

There were also allegations of fraudulent training claims made by certain training providers and inflated billings were allegedly done in collusion with HRDF staff.

By Royce Tan The Star