| Mida D-G dismisses RM5.5m fraud allegations Posted: 02 Sep 2010 12:19 AM PDT  By Teoh El Sen (www.freemalaysiatoday.com)
KUALA LUMPUR: The Malaysian Industrial Development Authority (Mida) director-general Jalilah Baba has brushed aside allegations of a RM5.5 million fraud and abuse of power in her agency. Calling it "baseless allegations", the Mida chief told FMT that the accusations were "the work of a small group of Mida staff" who are resisting the corporatisation of Mida.
"The corporatisation of Mida will ensure stringent and strict performance criteria of working and delivery... some of the staff are not ready and not willing to work hard and be monitored seriously by Key Performance Indicators," she said, adding that Mida, understanding the trepidation to change, has undertaken several initiatives to support its staff.
She said the corporatisation of Mida was approved by Prime Minister Najib Tun Razak and is done so for Malaysia to enhance its global profile and investment competitiveness.
"Misuse and abuse of funds need to be made with clear proof without which we risk tainting the reputation of individuals, teams and institutions unduly and carelessly," said Jalilah.
Previous media reports, quoting several unnamed officers, alleged that a public relations contract was awarded, without tender, to an advertising company by Jalilah.
It was alleged that the fraudulent activities involved a company called Friends Advertising Sdn Bhd (FASB), which was appointed to handle Mida's public relations activities in Malaysia and abroad.
Responding to the allegations, Jalilah said that the FASB contract was awarded through a price quotation (sebut harga) process, and not through direct negotiation.
"Several companies were invited to quote defined terms of reference. The submissions from these companies were evaluated by the technical and price committees, both of which are independent of each other," she said.
The technical committee is chaired by a senior director and the price committee is chaired by the director of corporate management. The director-general of Mida is not involved at all in those committees, she said.
The real role of FASB
Jalilah said the most suitable company was then recommended to the Mida management based on price, experience, capability and exposure.
 "Then it goes through a negotiating process to draw up a contract which is approved by the legal adviser in Ministry of International Trade and Industry (Miti). There is clear documentation to prove that FASB was not appointed through direct negotiation," said Jalilah.
She also said the reports were "factually incorrect" as the RM5.5 million was not the cost of FASB's contract, but rather the cost of producing and buying media for Mida advertisements for the whole of 2010, which did not involve FASB.
"FASB is not involved in the booking process at all. FASB is only responsible for negotiating the best rates possible with the media, both local and international. The buying of media space falls under the direct responsibility of Mida," she said.
She stressed that Mida issued payments of ad space directly to media owners, totalling 34 publications (22 international and 12 local including Forbes, International Herald Tribune, FDI Magazine, NSTP, Berita Harian, Sin Chew Jit Poh and The Edge Financial Daily), and not to FASB.
"The RM 5.5 million was approved through a finance budget committee and the selection of publication is done through a committee in the media department that recommends those selections to the director-general," she said.
Jalilah said as a result of FASB's negotiations, Mida was able to gain an advertisement space worth almost RM7.5 million, from the RM5.5 million, to be spent and subsequently save over 35% on advertisement spending.
She said FASB is also responsible for negotiating free editorial write-ups in most international publication.
Jalilah also denied allegations that FASB was given a "special status" and cost of projects are doubled at its "whims and fancies".
"There is no special status involved. FASB was appointed through a legal process," she said, adding that a monthly RM15,000 retainer fee for FASB is "market standard" value and was the most reasonable compared to other submissions.
Corporatisation plan
She said the appointment of FASB was for a list of agreed activities including corporate image building, assisting Mida in all events held domestically, preparation of media kits and handling press conferences and interviews. In addition, Mida can seek ad hoc and specific materials from FASB.
"All costing submitted by FASB will be separate from the retainer fee and the agency (FASB) will have to submit a separate schedule of costing. This covers the cost of monitoring and purchasing video clips from TVs," she said.
Jalilah said so far Mida has purchased 14 video clips at a cost of RM177.70 per clip, and commission for FASB was just RM31 for the services of tracking, monitoring and purchasing.
On allegations that she herself was "well aware" and that these allegations were an "open secret", Jalilah said any such abuse of power would have been queried by the management.
"All procedures and processes observed are overseen in the full knowledge of the secretary-general and senior management of Miti and its minister. Reporting of appointment processes and budgets expenditures is done in our management meetings with Miti," she said.
She also dismissed talks that the move to corporatise Mida will leave more than half of Mida's 800 employees in limbo.
Najib had announced in March that Mida will be corporatised and renamed as Malaysian Investment Development Authority. |
| Mida D-G in RM5.5 million fraud? Posted: 02 Sep 2010 12:14 AM PDT  from www.freemalaysiatoday.com ( By FMT Staff)
BANGI: The Malaysian Industrial Development Authority (Mida) office in Jalan Duta is buzzing with allegations of fraud over a RM5.5 million public relations contract awarded, without tender, to an advertising company.
Alleging power abuse and acts of swindling, several officers claimed that Mida director-general Jalilah Baba was well aware of the goings-on in the organisation and was in fact involved in the case.
A report in Harakahdaily quoted several unnamed officers who alleged the fraudulent activities involved a company called Friends Advertising Sdn Bhd (FASB) which was appointed to handle Mida's public relations activities in Malaysia and abroad.
According to a document dated June 17, 2009, Mida not only appointed FASB via direct negotiation, but it also offered the company other lucrative jobs, which were outside its scope of work.
Among the jobs given to FASB were publishing and printing Mida materials, preparing exhibition panels and promotional collaterals such as buntings, greeting cards and corporate brochures.
"All these were contracts awarded without open tenders. There is only one company now handling the entire job," said an officer involved in the selection process.
"Changes have taken place here since Jalilah took over the technical and pricing committee. We've cancelled the tender process to enable her to directly appoint the company," said another officer.
Citing an example, he said, Mida had appointed FASB for the "Rebranding of Mida & Malaysia" job (under its media plan 2010) for RM15,000 a month.
Going against procedures
The officer said according to a notice dated Dec 28, 2009, Jalilah had approved a FASB proposal worth RM5.5 million without a tender process.
"This is against government and Mida's finance procedures. It is clearly stated in our guidelines for government procurements that the director-general's authority to approve projects without tender is limited to RM50,000.
"In this case, the director-general had approved RM5.5 million.
"This has given FASB the upper hand. Riding on its special status, it has now doubled the cost price of the projects at its whims and fancies. For instance, FASB charges RM15,000 for designing an advertisement when the market price is between RM1,200 and RM2,500.
"There is also a directive from Jalilah that all purchases of video clips from TV1, TV2 and TV3 be made through FASB, which charges an additional 17.6% service fee.
He said that in the past, Mida's media and communication division used to buy these clips directly from the stations at a lower cost minus the 17.6% service fee.
"None of the current projects are awarded via open tender. Even a mock-up design for investment advertisement worth RM200,000 is awarded on direct negotiation," said the disgruntled officer.
Harakahdaily said allegations of swindling within Mida were common knowledge among the staff, especially since moves to corporatise Mida was put in place.
On July 9, Harakahdaily quoted Jalilah as saying that moves to corporatise MIDA was underway and legal scrutiny of the process was mandatory.
She, however, declined to reveal details of the process which were announced by International Trade and Industry Minister Mustapa Mohamed on May 28.
However, it is understood that Jalilah and her team have been given the responsibility of preparing amendments to the Federal Industrial Development Act 1965 (amended in 2000) to enable the organisation "to be truly free" in corporate governance and no more under the ministry.
The move to corporatise Mida is likely to leave some 500 employees in limbo. The new entity is expected to retain only 300 of Mida's 800 staff. |
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