Prolonged C-level vacancies causing anxiety among CMSB minority shareholders

 

Several C-suites at CMSB are now vacant, and minority shareholders say this may be a contravention of corporate governance requirements. (Wikipedia pic)

PETALING JAYA: 

Minority shareholders at Cahya Mata Sarawak Bhd (CMSB) have raised concerns over what they claim is the failure of the corporation to fill several C-level positions that have been vacant for some time now.

The shareholders who spoke to FMT Business on condition of anonymity claimed that without a senior executive with the right qualifications and experience to head crucial departments such as audit, compliance, and risk management, several legislation and guidelines have been breached.

Over and above that, they said, the management of the group and its subsidiaries have also not been subject to the required scrutiny.

“These three departments — risk management, compliance and audit especially — are critical functions that require proper oversight,” one of the shareholders pointed out.

To date, more than 10 senior positions, several of which are at the C-level, remain vacant, some for more than two years now.

Among them are the heads of audit and compliance, which have been vacant since October 2022 and January 2023 respectively. Meanwhile, there has not been a chief risk officer since October 2023.

A check on the CMSB website shows that currently only the positions of group chief financial officer and group general counsel have been filled.

The group CFO is Mandar Shrikrishna Namjoshi and the general counsel is Izzam Ibrahim.

According to one of the minority shareholders, the audit process is now being overseen by the board audit committee, which reports to the board of directors.

“One responsibility of the board is to review the audit report. How can this happen when a committee comprising the board members themselves are doing the auditing?” the minority shareholder asked.

“We are worried that there is no check and balance, due diligence, or processes within the group,” he added.

Under the Malaysian Code of Corporate Governance, the heads of risk management and audit report directly to the respective committees at the board level — namely the group risk committee and group audit committee.

These committees review the reports from the departments they oversee, ensuring oversight of the management of the group and its various subsidiaries.

“Now that the positions of head of audit and risk management are still vacant, it is left to the second-tier management, who report directly to the group managing director, to take over the audit and risk management functions,” the shareholder said.

“Therefore, the board committees’ ability to continue to provide the necessary oversight over the management is called into question.

“This is a clear breach of all requirements under corporate governance or listing rules,” he added.

Under the Securities Commission’s (SC) corporate governance requirements, the board of directors must have oversight of the management.

The shareholder pointed out that “without a robust internal audit department led by an experienced head”, all of CMSB’s functional departments and divisions are no longer subject to scrutiny as required under the regulations.

“Therefore, all reporting is questionable,” he said.

Other concerns 

The minority shareholders said that at the subsidiary level, similar problems prevail. For instance, they said, of the nine business divisions, the managing director position for three of them have also been vacant for some time now.

The loss-making phosphates business division, which lost its managing director in September 2023, is now being headed by an “interim” chief operating officer.

The cement division has been without a head since July 2022 and is now headed by Choong Ju Tang but in an acting capacity. Choong was a general manager at Lafarge Concrete Malaysia before moving over to CMSB.

PPES Works has not had a managing director since August 2024. - FMT