The Small and Medium Enterprises Association (Samenta) said the goal of the mandatory levies paid by employers was for HRD Corp to hold training programmes to develop the Malaysian workforce.

Samenta president William Ng added that the levies and HRD Corp’s management of its funds were two separate issues.

“Given the transitional nature of our current economy, the need to upskill our workers is even more urgent. As such, employers, including SMEs, must continue to contribute to the fund and utilise them effectively.

“We should not allow the findings to take our focus away from the development of our workforce, to upgrade our SMEs, and to prepare ourselves for an evolving – and evolved – economy,” he told FMT.

Ng nevertheless maintained that the issues highlighted in the reports by PAC and the A-G should be thoroughly investigated by the authorities, noting that the Malaysian Anti-Corruption Commission had already started a probe.

“We will, of course, follow this closely to ensure that employers, including SMEs, are given the appropriate explanation for what transpired, and wrongdoers are prosecuted.”

SME Association of Malaysia president Ding Hong Sing also called for levy collections to remain but said stringent measures must be imposed to ensure that the funds are used for their intended purpose.

He said suspending collections would jeopardise training programmes necessary to upskill the workforce, adding however that Putrajaya must guarantee the levies collected are not misappropriated.

Ding also called for improvements to HRD Corp’s training programmes, saying this was imperative to keep Malaysia from falling behind its regional neighbours.

“Practical know-how is more important than academic knowledge. With about 1.1 million SMEs in the country, there is an urgent need to help them embrace digitisation and automation effectively,” he said.

Last week, the Malaysian Medical Association called for a halt to firms paying mandatory levies to HRD Corp pending the authorities’ probe into alleged mismanagement by the organisation.

It said the levies paid were the hard-earned income of businesses entrusted to the HRD Corp for the development of talent.

This came after PAC said HRD Corp had been “aggressively” using RM3.77 billion in levies collected for high-risk investments. The levies are meant to be used for the company’s training programmes.

PAC also said HRD Corp’s investment panel had failed to report the entirety of its investment activities to the company’s board of directors.