Stop letting private firms hold public funds, say anti-graft groups

 Transparency International and C4 call for real-time revenue collection systems and procurement reforms following Zetrix's RM314 million arrears.

JPJ suspended MYEG subsidiary Zetrix AI Bhd after the company failed to pay over RM314 million in unremitted road tax fees and traffic summonses collected since May.

PETALING JAYA:

Anti-graft watchdogs have urged Putrajaya to stop allowing private intermediaries to hold public funds when facilitating government collections, following the revelation that Zetrix AI Bhd owes RM314 million in arrears.

Transparency International Malaysia (TI-M) said future concession agreements for fee collections must include strict contractual safeguards to prevent major revenue defaults.

TI-M president Raymon Ram suggested that revenue collections be paid directly into the government’s accounts, with vendors paid separately by the relevant agency.

“The starting principle should be simple. A private service provider may facilitate the collection of government revenue, but it should never accumulate or exercise discretionary control over large amounts of public money,” he told FMT.

Raymon Ram.

“Contracts should contain predetermined suspension triggers so that a vendor cannot continue accumulating public revenue while repeated notices are being issued,” Raymon said, adding that future concession contracts should have strict enforcement mechanisms.

Transport minister Loke Siew Fook revealed earlier this week that MYEG subsidiary Zetrix AI Bhd had racked up RM314 million in unremitted road tax fees and traffic summonses collected on behalf of the road transport department (JPJ) since May.

JPJ suspended the company’s collection services on Oct 5. It was also reported that JPJ had issued 35 notices and held four engagement sessions, which ultimately prompted Zetrix AI to submit a settlement proposal to Putrajaya.

According to Loke, the company, formerly known as MyEG Services Bhd, then submitted a cheque worth RM231 million. However, the bank later advised that it was instructed by Zetrix not to process the payment.

Raymon criticised the five-month delay in taking decisive action against Zetrix, arguing that merely issuing repeated notices while arrears continued to mount was an ineffective control mechanism.

“Thirty-five reminders cannot be regarded as an adequate control mechanism when hundreds of millions of ringgit in public revenue are involved,” he said.

Raymon urged Putrajaya to launch an independent forensic audit to establish a clear chronology of events dating back to the first missed remittance.

“Accountability must also follow the decision-making chain and should not stop at junior officers, if senior officials knew of the accumulating exposure and had the authority to intervene,” he said.

Bryan Cheah.

Center to Combat Corruption and Cronyism (C4) senior research officer Bryan Cheah cautioned against placing immediate blame on ministry personnel, citing the repeated notices and bounced cheque.

Cheah, however, said the authorities should probe if there were elements of corruption behind the unremitted funds.

“C4 invites the government to reassess current procurement policies to ensure contracts and concessions given to private sector players adhere to a strict code of conduct that would include a set protocol for actions to be taken should non-compliance with contract terms occur,” he said.

The core objective of sound public administration is preventive oversight, he added, pointing out that punitive measures only act after the fact.

“By nature, penalties are responses in situations where a breach or violation of terms has occurred. The purpose of good governance is to ensure such occurrences do not take place to begin with,” Cheah said. - FMT