Auditor-General Flags TH Hotel, TalentCorp as Worst GLCs for Corporate Governance

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Only one of the four directors of THHR board is independent, with none having any prior experience in the hospitality industry.

The room occupancy rate of the Tabung Haji (TH) hotel chain managed by TH Hotel & Residence Sdn Bhd (THHR) was only 37% to 45.9% from 2016 to last year, lower than the target of 50.9% to 61.7%.

According to the Auditor-General’s Report 2019 Series 1 released today, the occupancy rate was based on the average number of rooms sold in its three hotels, namely TH Hotel Kelana Jaya (THKJ), TH Hotel Penang (THHP) and TH Hotel Kota Kinabalu (THKK).

“During the period, an average of 36,788 to 38,887 rooms were offered. Overall, TH Kota Kinabalu achieved the highest occupancy rate of between 46 and 57 percent compared with the others.

THKK became the largest contributor to TH’s hotel room rental income, exceeding its target by more than 70% every year, it added.

Auditor-General Datuk Nik Azman Nik Abdul Majid said the company’s corporate governance has been less than satisfactory.

“TH ventured into hospitality and services through the establishment of its fully-owned subsidiary, THHR, with a paid-up capital of RM100 million.

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“Improvements are needed in aspects related to chairman, board of directors, chief executive officer, company secretary, Standard Operating Procedures, Strategic Plan and Key Performance Index, Audit Committee and Internal Audit.

“Damaged facilities at the premises have yet to be repaired, rendering (some) rooms unfit for occupation, thus affecting the revenue,” he said in a media briefing in Putrajaya today.

The report also revealed that only one of the four directors of THHR board is independent, with none having any prior experience in the hospitality industry.

It also noted that THHR’s chief executive officer has yet to be appointed since the position fell vacant on May 1 last year.

“The acting CEO is its Human Resources and Operations senior manager who is currently carrying out two duties at the same time,” the report said.

The report also attributed the poor performance to weak promotion and marketing, with little allocated to sales and marketing activities compared to the budget.

He said an accumulated RM204,427 of debts owed to THHR have yet to be settled.

Nik Azman said THHR was advised to enhance the functions of its chairman, directors, chief executive and company secretary.

It was also advised to review its standard operating procedures, strategic planning and key performance indicators (KPI), and internal auditing.

On Talent Corporation Malaysia Bhd (TalentCorp), the A-G’s report revealed that it has not had a chief executive since the change of government in 2018.

Nik Azman said there have been management issues in the government agency due to a lack of leadership.

Among other TalentCorp’s issues highlighted in the Auditor-General’s Report are that its standard operating procedures do not go through its board and no internal audit has been carried out.

TalentCorp is the national agency that drives Malaysia’s talent strategy towards becoming a dynamic talent hub. Its initiatives are tailored for professionals, students, employers, and industry and academia partners.

The report also found that the results of the Returning Expert Programme (REP), targeted at Malaysian professionals overseas, are not satisfactory. Little was done to promote REP, and its key performance indicators were set “very low”. Also cited are the scheme’s poor data-keeping and SOPs.

And yet, Putrajaya pumped RM367.57 million into TalentCorp’s development, and a further RM124.85 million for its operations from 2011 to last year, said Nik Azman.