Tuesday, June 22, 2010

Bernas Claims Its Donations To The University Was Noble

Posted the other day: MSWG Asking Why So Much Money Donated By Syed Mokhtar Firms To Albukhary International University

Yesterday was Padibera( Bernas) turn to answer the issue.

Star Business carried the following:
Padiberas board discussed but did not hesitate to support private initiative (Strange, the print media version was named 'Bernas: Donation is 'noble')

  • Tuesday June 22, 2010
    Padiberas board discussed but did not hesitate to support private initiative

    KUALA LUMPUR: Padiberas Nasional Bhd’s (Bernas) RM20mil contribution to the Albukhary International University is for a community project and seen as a noble cause, said chairman Datuk Wira Syed Abdul Jabbar Syed Hassan.

    “We were requested by the university to contribute and help in the building cost. It is a private initiative and the Government recognises it as a community project,” he told a post-AGM press conference yesterday.

    He said this in response to a news report that
    shareholders were questioning Bernas’ substantial donation to the Tan Sri Syed Mokhtar Albukhary-owned university. The RM20mil contribution is about 11.1% of Bernas’ net profit for the financial year ended Dec 31, 2009 (FY09).

    Two other Syed Mokhtar-related companies, Tradewinds (M) Bhd and Tradewinds Plantation Bhd, contributed RM10mil and RM20mil respectively. Bernas is 72.3% owned by Tradewinds (M).

    The construction cost of the university is about RM380mil.

    On whether there was any hesitation on the board’s part in approving the contribution, Syed Abdul Jabbar said: “There was a lot of discussion but no hesitation. We had two representatives from the Government but they also supported the private initiative.”

    He said Bernas hoped in FY10 to maintain the profit it achieved in FY09 and also wanted to see more growth in dividends.

    Bernas recorded a net profit of RM179.5mil for FY09 - the highest since it was privatised in 1996 - versus a loss of RM57.5mil in FY08. The distribution of a 24% dividend per share was also the highest.

    This was mainly due to the relative stability of the local and international markets and effective pricing strategies.

    Syed Abdul Jabbar said Bernas would also benefit from operational synergies with its parent, thus helping to improve bottom line.

    “We can look at savings by sharing distribution networks, expertise, infrastructure and resources. This will improve efficiency as well. We also need to read the market well and be more business-minded,” he said.

    According to managing director Bakry Hamzah, the group is also targeting to open another 18 Safe More retail outlets in the Klang Valley, Pahang, Selangor and Johor, which would incur a capital expenditure of some RM5.4mil. Bernas currently has 30 outlets.

    In addition, Bernas may reduce the production of lower grade Super Tempatan 15 rice to pre-crisis levels of 10% of monthly consumption versus the current 30% if the Government reduces subsidy.

    The country’s monthly rice consumption is about 180,000 tonnes.

I believe the issue is not whether Bernas or Tradewinds (M) or Tradewinds Plantations could afford such charity or not.

The issue is very tacky because all these companies donated to the same university.

And this university belongs to Yayasan Albukhary.

And Yayasan Albukhary belongs to Syed Mokhtar.

And Syed Mokhtar controls these companies making the donation.

Which makes it tacky.

How could it not be tacky?

Conflict of interest certainly comes to mind.

Since it is mentioned that the donation is 'noble' and we are indeed talking about charity, why are these PUBLIC (note I stress the word public because a huge portion of these companies belongs to the PUBLIC too!) making these donations? Why can't the owner of the university contribute fully for this noble cause himself? Why get the public? We are talking about noble donation yes?

And mind you, the sum of rm 380 million to construct that university is massive!


chin said...

thank you for highlighting this.