HRDF chairman almost quit after 6 months over deal to buy Bestinet building

A scandalous development almost took place in the past week involving a minister in the latest Malaysian government, but clearer minds managed to put a stop to an underhanded deal before it could take place and become fodder for opposition politicians.

It took a resignation threat from the minister’s handpicked representative for the scrapping of this underhanded deal to bleed from the coffers of Human Resources Development Fund (HRDF) – which collects levies from Malaysian employers with the aim of upskilling local staff.

The saga can be traced to when Nepal barred its citizens from working in Malaysia in mid-2018 over corruption involved in the work permit processing – resulting in severe loss of revenue at Bestinet Sdn Bhd, which owns and operates an end-to-end platform for foreign worker management in Malaysia.

With Nepal yet to resume allowing its citizens to work in Malaysia, Bestinet was forced to seek operating funds elsewhere – including making plans to sell the prized asset of its headquarters building.

“Bestinet was desperate to raise cash fast, especially when borders got closed due to the Covid-19 pandemic,” said an informed source. “When the Malaysian government extended border closures till year-end, Bestinet had no choice but to put its Cyberjaya headquarters up for sale.”

But there were no interested buyers amid the Covid-19 induced economic gloom and Bestinet turned to the latest Malaysian government for aid – specifically Human Resources Minister Saravanan Murugan.

This minister had forced a change at HRDF in April 2020, shortly after being appointed – replacing then HRDF chairman Noor Farida Mohd Ariffin with Nelson Renganathan, a fellow senior party member at Malaysian Indian Congress (MIC).

Sensing a way to siphon monies into MIC, Minister Saravanan Murugan “agreed to instruct HRDF to buy the Bestinet headquarters building,” said the source.

But this underhanded deal quickly faced a surprising hurdle – Nelson Renganathan refused to approve or sign off on the purchase.

To remove this obstacle, Nelson Renganathan was instructed by the minister to be put on temporary leave – so he could avow any involvement – but the HRDF chairman countered by threatening to resign immediately.

The resignation plan was confirmed by Nelson Renganathan in recent Malaysian news reports, which had attributed this development to a fallout with HRDF CEO Shahul Hameed Dawood.

“The real reason for the fallout was this Bestinet headquarter building deal,” explained the source. “Nelson Renganathan was going to go public with details after he resigned.”

If Nelson Renganathan had proceeded to resign, the scandal would have shaken support for the current Malaysian government – which just manages to hold onto a slim majority in Parliament and opposition leader Anwar Ibrahim already claiming just weeks ago to have already swayed enough MPs to force another government change.

So Minister Saravanan Murugan had to scrap the Bestinet headquarters building deal and Nelson Renganathan remains as HRDF chairman – averting a scandal which could have toppled the Malaysian government, which had already gone through one major change in February 2020 when then Prime Minister Dr Mahathir Mohamad abruptly resigned.

As to why Nelson Renganathan was steadfast against the Bestinet headquarters building deal – apart from the aforesaid potential political ramifications – the source made reference to an earlier financial scandal at HRDF.

Back in 2017, four high-ranking officers pocketed a staggering 1.25 million Malaysian Ringgit (US$300,000) in individual performance bonuses for the year.

The top executive’s individual bonus of MYR616,000 for 2017 was more than triple the bonus received in 2016 (MYR191,000) and far higher than the bonus in 2015 (MYR60,000) or 2014 (MYR17,000). The 2017 bonus of MYR616,000 translated to a growth of a whopping 3,524% in just three years.

This executive also received a salary revision twice in 2017 – from MYR32,000 a month to MYR47,000 a month in March and subsequently to MYR56,000 a month just four months later. This translated to a 75% increase in salary within a year.

As for the three deputies, each received RM211,000 – on top of the 1.75 months corporate bonuses they all received.

The source said Nelson Renganathan didn’t want further financial scandals at HRDF – seeking to avoid antagonizing levy-contributing Malaysian employers already hard-hit by the Covid-19 economic slowdown. Without these levy contributions, HRDF could easily find itself becoming another cash-strapped entity and the source said Nelson Renganathan didn’t want this hit to his professional reputation.

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