Edge Weekly Millions from MMC, Bernas go down the drain

by **Cals** Tue 22 Apr 2014, 19:51

Edge Weekly Millions from MMC, Bernas go down the drain

Business & Markets 2014

Written by theedgemalaysia.com

Tuesday, 22 April 2014 15:45

BACK in 2009, MMC Corp Bhd, controlled by Tan Sri Syed Mokhtar Albukhary, donated some RM75 million or 30% of its net profit to the Albukhary International University (AIU). This caused an uproar among the company's minority shareholders, who took the management to task at an annual general meeting.

The shareholders were understandably irked that the donation was made without their consent, pushed through a loophole. Many also felt that if Syed Mokhtar was so keen to help AIU, he should have just got MMC to pay dividends and then donate his own money.

The RM350 million AIU in Alor Setar, Kedah, was under Yayasan Albukhary, which in turn is controlled by Syed Mokhtar.

It wasn't just MMC that suffered. Other companies under Syed Mokhtar's control also dished out large amounts for the university.

To recap, the three listed units then - Tradewinds Plantation Bhd, Tradewinds (M) Bhd and Tradewinds Corp Bhd - parted with more than RM20 million while Padiberas Nasional Bhd (Bernas) gave RM20 million. The tycoon's water treatment company, Aliran Ihsan Resources Bhd, also forked out RM20 million, which was about two-thirds of its net profits for that year.

Reports back then had it that Syed Mokhtar-linked companies gave between RM130 million and RM150 million to the university. An interesting point is that AIU's costs such as tuition fees, accommodation, food and books, are borne by Yayasan Albukhary.

Then last week, Second Education Minister Datuk Seri Idris Jusoh said the university is likely to be shut down.

What has become of the millions given by the companies?

This justifies the concerns of some shareholders over the donations and that their approval should have been sought, as it seems that the sums contributed by those companies have now become money down the drain.

And if AIU is to be considered part of corporate social responsibility efforts, then it has to be based on a social enterprise business model that is sustainable.

This article first appeared in The Edge Malaysia Weekly, on April 21, 2014.