Thursday, November 30, 2006


As reported in theedgedaily today:
"Syarikat Takaful Malaysia Bhd chief executive officer (CEO) Md Azmi Abu Bakar failed to get re-elected as a non-executive and non-independent director of the company at its AGM on Nov 29. Md Azmi, 42, was appointed as CEO on Sept 15, 2005 and prior to the appointment, he was the chief operating officer from 2003. He took over as CEO from Datuk Mohd Fadzli Yusof, who also failed to get re-elected as a non-executive and non-independent director. Syarikat Takaful said the resolutions to re-elect them were rejected by the shareholders. It said the resolution to adopt the audited financial statements for the year ended June 30, 2006 was carried, but the auditor KPMG Desa Megat & Co had modified its report with an "except for" qualification. It did not elaborate on the qualification."

There is obviously something not right. If you were to glean through the NSTP BIz Times today you will find interesting sentences which kinda points to what is inherently wrong about having less than professional managers, or seeming pros who does not act like one.

Shareholders were shocked when the company disclosed that there were RM200m "unreconciled differences" in its financial statements ended June 30 2006. However the company's auditors, KPMG Desa Megat & Co, issued a modified report just before the AGM took place.
My Lima Sen - Unreconciled Differences, that only makes sense in a divorce case, if its an accounting thing, its not good. The auditors would have been trying to reconciled the differences for the longest time, and probably the accounting partners would have had to rolled up their sleeves when they also could not reconcile them - still unreconciled at AGM, very bad form. UR means you don't know where the balances went to, or things just went missing.

Syarikat Takaful Malaysia Bhd chairman Tan Sri Hadenan A. Jalil assures shareholders that there is no need to be alarmed over some irreconcilable items which the auditors brought up at the company AGM yesterday.He said there was no evidence of misuse of funds or other wrongful acts. It will not affect the performance of the company in terms of profits.
My Lima Sen - Accounting is a simple concept, its man-made, every credit must have a debit entry, left hand right hand. When it doesn't balances, and the accountants cannot find them .... there implies something grossly not right, and very poor controls, apparently nobody knows where is the RM200m. My god, even my mum would scream if RM20 was missing from her shelf! Whether there was misuse of funds or CBT we don't know, but we can be sure that the company have VERY POOR CONTROLS. Can someone from the company even admit to that? Even if the differences were to be on the credit side - that doesn't detract from poor operational controls.

The chairman added that the company's accounting system was changed from a cash to accrual accounting is also to be blamed for the differences.
My Lima Sen - That statement reveals a lot about what is wrong with a lot of senior management. If it was a Japanese company, the chairman and CFO would have committed seppukku already. Here we find the chairman grasping at straws, Takaful is NOT THE ONLY COMPANY or THE FIRST COMPANY to change from cash to accrual system in the history of corporate accounting. Just admit that the CFO was not up to speed and apologise on behalf of the less than perfectly-qualified accounting staff and overall poor supervision. Apologise for not being able to be aware of prevailing problems and inability to rectify them within a reasonable time frame. The failure to "acknowledge inferior performance", "inability to admit fault or what is lacking", "the persistence of coming up with slogans and excuses to mask inferior performance", "the inability to anticipate problems and plan ahead properly" - in one zorro slash of the sword, that's largely what's lacking in professional management in most GLCs.

1 comment:

simon_alibaba said...

in the land of Boleh; there are many more like the takafool, with so many unheard of glocal 'kolej" churning out glocal" akauntant" i am not surprise, why now only happen ah? in a land of buta2 boleh, the one eye close is the king! the majority of the rakyat "kulture" now can be sum up in this manner; cakap pun tak dengar; dengar pun dont understand;
tak faham pun dont ask; ask pun tak buat;

buat pun buat salah; salah pun tak admit;

admit pun tak correct;

correct pun tak happy; not happy pergi perhimpunan agung minta cek yang SEMAKIN HARI SEMAKIN KECIL!


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