This article first appeared in The Edge Malaysia Weekly on June 25, 2018 - July 1, 2018

Last week, Human Resources Development Fund (HRDF) CEO Datuk C M Vignaesvaran Jeyandran resigned after allegations of misappropriation of funds. The HRDF is a billion-ringgit fund to which employers contribute 1% of their monthly payroll as a levy.

Of the amount collected, 70% is claimable via various training grants and schemes. The remaining 30% goes to a pool to support strategic initiatives, such as achieving the targeted 35% skilled workforce by 2020.

In 2017, HRDF collected RM712.26 million and disbursed RM678.78 million.

Vignasvaran’s departure comes amid allegations that RM300 million in HRDF funds had been misappropriated. A report made to the Malaysian Anti-Corruption Commission suggests there was a conflict of interest as a HRDF board member was also a training provider, and was channelling contracts to his own companies.

How could the HRDF board and senior management allow that to happen? As directors and senior managers, they should be on guard against any possible wrongdoings.

HRDF needs to be overhauled. Many companies complain that there are too many restrictions when it comes to how they should utilise the money they have contributed.  It will now be up to Human Resources Minister M Kula Segaran to ensure that companies have better access to HRDF funds, and a bigger say on how they should be used in the future.

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's AppStore and Androids' Google Play.