After Days of Denials YaPEIM Admits to Fund Misuse

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The Malaysian Islamic Economic Development Foundation (YaPEIM) board of trustees’ chairman Mohd Daud Bakar today admitted the foundation’s previous management had misappropriated funds meant for the Islamic body.

Speaking to the media, Daud said following the exposé, the board of trustees (LPA) has restructured all committees under YaPEIM in order to improve the foundation’s administration.

“Based on an audit report as well as LPA’s own initiative to track down mismanagement since November 2018, the LPA has identified several wrongdoings and negligence coming from the foundation’s management.”

He said the problems are being addressed and they are cooperating with auditors who are in the process of formulating new financial controls to prevent future misappropriation.

“At the same time, the LPA has restructured all committees under this foundation to improve its administration as well as to strengthen its checks and balance.”

Daud said media reports on high legal fees, expensive bonuses and gold pawn scandals were old cases involving YaPEIM’s old LPA, adding that the new LPA has looked into the matter.

“We are aware of the issue involving the legal fees, bonuses and the gold pawn scandal. It happened under the watch of YaPEIM’s former LPA.

Hasnoor Hussain/TMI

“The new board will be taking the necessary action.”

Daud’s statement today was the opposite of what was said by YaPEIM’s head of legal department Adawiah Abdul Samad said on Sunday.

She told The Malaysian Insight that there were no wrongdoings involving former prime minister Najib Razak’s aide, adding that the legal fee paid to the aide did not even reach RM500,000.

The legal fees, which was earlier reported to be close to RM1 million, was instead paid from YaPEIM’s general account, said Adawiah.

“We deny the accusation. YaPEIM had never used the money meant for orphans to pay for Najib’s aide who was a former director here.

“The legal fee did not even reach RM1 million, it was not even half a million.

“The payment came from the general account that was sanctioned by YaPEIM’s board of trustees,” the legal officer said after a closed-door meeting of the foundation’s top management over the weekend.

The Malaysian Insight reported last week that funds totalling RM1 million from YaPEIM to provide aid for orphans were misappropriated to pay legal fees for one of Najib’s aides.

The report was published after The Malaysian Insight had sighted confidential government documents on the alleged misappropriation of funds at the Islamic institution.

According to discussion notes on the financial expenditure of YaPEIM, the money was channelled to settle legal fees to the aide, who was a director for YaPEIM in 2017.

In the documents, the aide was found to have made payments exceeding RM1 million in several tranches to two law firms, in small amounts each time.

Meanwhile, the LPA will also review its staff bonuses after it was reported that senior officers in the Islamic body received hefty payments.

Daud said that the new board has in principle agreed to pay bonus based on its staff performance.

“We are in the midst of creating a new formula as to how should we give out bonuses to our staff, including senior management.

“In principle, we have agreed to give out the bonus based on merit,”   he said.

Daud added that the old scheme used to calculate bonuses for each staff will be scrapped and will also be based on the foundation’s financial situation as well as the country’s economy.

The Malaysian Insight reported last week that directors received bonuses of RM400,000, senior officers RM250,000, the director-general RM100,000 and others in senior positions RM35,000.

“The director-general and directors of YaPEIM received high salaries and allowances. On top of that, they also received allowances from subsidiaries to which they appointed themselves as directors.

“Each subsidiary paid them allowances of between RM1,500 to RM4,500. YaPEIM has 10 active subsidiaries, which paid out these allowances,” the report read. – TMI

Earlier reports:

May 13, Islamic Charity Arm YaPEIM Lost RM12M in Gold Pawn Scheme

May 11, RM1M for Orphans Used to Pay Legal Fees for Najib’s Aide