A simple way to resolve TAR UC issue

Last night, on my way out of Lahore, Pakistan, using my mobile phone, I read the fascinating article by Sabah MCA leader Dr Pamela Yong titled “Contractual obligation of federal government to TAR UC remains unfulfilled”.

Before I proceed, I must disclose that I am an interested party in this current TAR UC issue as an alumnus of TAR UC, an independent member of the Audit Committee of TAR UC Education Foundation Bhd (TARUCEF), the legal adviser to the TARcian Alumni Association, and also as an appointed independent trustee of the newly formed TAA Education Trust Fund.

The article prompted me to, using the same mobile phone, immediately raise with Pamela three pertinent points which I believe she may have inadvertently overlooked in her research on this issue.

Over the past 50 years of its existence, the TAR UC board of governors (BOG) and its board of trustees (BOT) have raised funds from the Chinese community, now with cash in hand of almost RM700 million and other assets worth a few billion ringgit. However, I must hasten to add, this is the fiduciary responsibility and legal duty of all concerned in the administration and management of TAR UC as the custodians and public trustees under both the common law and various other statutes.

Hence, Pamela rightly pointed out that TARUCEF is rigidly and strictly structured and governed by various laws, and under three different ministries to ensure there is transparency, accountability and proper corporate governance all round as imposed in their licensing requirements to TAR UC.

The article also explains why the management of TAR UC is professionally managed without party political interference in its day-to-day operation and that the BOG has independent members as stakeholders from the government, representatives from its two alumni bodies etc.

However, Pamela may have overlooked three basic points. Firstly, it has to be placed on record that the BOT, and not the BOG, is the highest and ultimate decision making body in the corporate structure of TARUCEF. BOG is merely involved in administration because the owner and ultimate decision-maker is the BOT. The BOT can override the TAR UC management and the BOG.

Strangely, nothing is mentioned by Pamela that from day one in 2013, when TAR UC was privatised, it has failed to comply with the requirement that at least 50% of the membership of the BOT must not be connected to its founders (meaning the two former presidents of MCA, or MCA itself), or TARUCEF itself (meaning the membership of TARUCEF and whose membership, incidentally, comprises MCA leaders).

This is a fundamental condition imposed in its incorporation by the Companies Commission of Malaysia, or SSM, under the domestic trade and consumer affairs ministry, the tax exempt status granted to TARUCEF by the finance ministry, and the licensing as a private university college by the higher education ministry.

For the record, since day one, the membership of the BOT is a subset of the entire membership list of TARUCEF. I need not have to remind Pamela that in 2013 that fundamental condition of not being tied or connected to any political party, a basic requirement, was imposed by none other than the BN government itself. Sadly, TARUCEF and BOT stand out for the breach, instead of compliance, to this fundamental condition.

Such a fundamental condition imposed by the government and the law is the norm for any foundation meant for a public purpose, like TARUCEF, on the grounds of public policy considerations. Otherwise, a foundation with a tax exempt status can be easily abused as a vehicle for tax evasion, money laundering activities, and even criminal breach of trust or CBT. We may note that currently someone powerful has been charged in court with allegedly abusing his foundation for some of these crimes.

Secondly, like any public institution of higher education, public funding was rightly given by the federal government from 1969 until 2013 as it was a public institution during that period. But TAR UC was privatised in 2013 and given to TARUCEF, controlled totally by MCA, without the payment of even a single sen when it was upgraded to become a private university college – which Pamela has overlooked.

Hence, the need for at least the aforesaid 50% independent representation in its BOT for public policy consideration of transparency, check and balance, accountability and good corporate governance since TARUCEF is the trustee and custodian of public money and assets by the billions in ringgit terms. Since 2013, TAR UC, as a private institution of higher learning, like any of its private counterparts, is technically not entitled to any public funding.

Lastly, notwithstanding TAR UC is now a privatised entity, the federal government in 2013 still promised a matching grant of up to RM60 million per annum, but strictly only on a best endeavour basis depending on its financial condition, and also subject always to the compliance of the fundamental conditions imposed right from the start in 2013 of not being tied or connected to any political party.

This RM60 million was reduced to RM30 million by the BN government under the 2017 and 2018 Budgets without any protest from MCA. Unfortunately, to date, TARUCEF – effectively MCA – has failed to comply with the aforesaid minimum 50% independent representation in its BOT and not being tied or connected to any political party, as required for its approval as a private institution of higher education by the higher education ministry.

In conclusion, my simple solution to Pamela is this: comply with the basic legal requirement of the TARUCEF Charter itself and its licensing requirements of not being tied or connected to any political party.

With that compliance, I earnestly hope all unnecessary political drama arising out of this TAR UC funding issue can finally be put to rest. Then, the poor hawkers who are legitimately and honestly trying to raise funds for TAR UC can also be spared from these unnecessary theatrics by some politicians trying to cover up their errors.

Kenny Ng Bee Ken is a reader of FMT.