FMT understands that BNM had in 2010 decided to withdraw its representative from the panel notwithstanding Section 26(2)(e) of the Human Resource Development Act 2001 (HRD Act) which requires the central bank’s participation.
Last week, the Public Accounts Committee (PAC) highlighted the absence of a representative from the central bank on HRD Corp’s investment panel since 2017, saying it was a violation of the law.
However, a letter dated July 12, 2010, sighted by FMT, suggests that the withdrawal was not due to any deliberate act or omission on HRD Corp’s part.
BNM had in its letter to then HRD Corp CEO Amirnuddin Mazlan said the central bank had, following the coming into force of the Central Bank of Malaysia Act 2009, reviewed the participation of its officers on boards and committees of all external corporations.
“(The withdrawal of our representative) is in line with the objective of ensuring that the bank’s mandate and responsibilities can be carried out effectively and after taking into account conflict of interest issues.
“Following this review, the bank has decided to discontinue the participation of its representative on (HRD Corp’s) investment panel,” read the letter signed by Nor Mashor, then secretary to the bank’s board of directors.
The letter supports testimony given by officials from the ministry and HRD Corp to the PAC recently.
The human resources ministry’s legal adviser, Shamsurryaty Shamsuddin, then HRD Corp’s chief operating officer, Ariff Farhan Doss, and the corporation’s senior legal officer, Merle Fernandez, all told the PAC that BNM had elected not to be represented on the panel.
The PAC went on to recommend that the HRD Act be amended to remove the requirement for BNM to be represented on the panel.
In a related development, human resources minister Steven Sim refuted another claim in the PAC report that HRD Corp’s investment panel had engaged in several “high-risk investments”.
On Wednesday, Sim told the Dewan Rakyat that 84% of RM3.77 billion had been invested by HRD Corp in low-risk investments such as cash, deposits, bonds, sukuk and trust accounts, and the remainder in equities.
Sim was also quoted by The Edge as saying that HRD Corp had recorded investment gains over the last four years: RM82 million in 2020, RM71 million (2021), RM90 million (2022) and RM176 million (2023).
HRD Corp is well on course to achieving its investment target of RM180 million for the current year. As of June, it has made investment gains of RM91 million.