Damning confidential report.
- YaPEIM not an ordinary charity trust fund, supported by the government with the PM as patron, who delegates a minister in the PM’s Dept, normally in charge of Islamic affairs, to oversee the organisation
- Former minister in PM’s Dept Jamil Khir Baharom allegedly misappropriated more than RM411k meant for charity work for his travels, golfing activities and shopping sprees
- Founders of Foundation for the Advancement of Orphans and the Poor claimed lawyer had intended to shut down foundation in order to bury scandal
- Payment made to lawyers did not exceed RM50k each time, to avoid having to get board approval
Funds totalling RM1 million from an Islamic foundation set up to provide aid for orphans were misappropriated to pay the legal fees for one of Najib Razak’s aides, according to confidential government documents sighted by The Malaysian Insight.
According to discussion notes on the financial expenditure of the Malaysian Islamic Economic Development Foundation (YaPEIM), the money was channelled to settle legal fees to the lawyer, who was an advisor to former prime minister Najib, as well as a director for YaPEIM in 2017.
The case involved a suit by founders for the Foundation for the Advancement of Orphans and the Poor (Pemangkin), who charged that YaPEIM had used its funds to sponsor former minister in the prime minister’s department Jamil Khir Baharom to trips to Europe, the United States and Australia.
The suit, which was filed by Pemangkin founders Mohd Yusoff A Bakar and Ahmad Fazil Hashim, in March 2017 also alleged that the lawyer had intended to shut down the foundation, which was placed under the YaPEIM in order to bury the scandal.
In the documents, the lawyer was found to have made payments exceeding RM1 million in several tranches to two different law firms, in small amounts each time.
“The legal fees did not get the approval from the YaPEIM board of directors; in fact, the payments made to the lawyers did not exceed RM50,000 (each time) to avoid having to get the approval of the board of directors.
“The lawyer’s fees have reached RM1 million,” said the document.
The report claimed that YaPEIM made three payments of RM50,000 each to the lawyer’s firm, on January 10, March 17 and April 9 of the same year.
The foundation also paid RM35,000 to Ash Hiani Group Sdn Bhd as the cost of negotiating the case management involving Yapeim and Pemangkin on April 12, 2017.
On May 12, another two transactions – RM 37,477 and RM 36,452 – were made to settle the remainder of the legal fees for the case.
The lawyer was a member of YaPEIM’s board of trustees from 2017-2019 and a former director for the strategic planning department of the Prime Minister’s Department.
Apart from the lawyer, Pemangkin also sued Jamil Khir and five other board of directors of Yapeim.
They are Mohd Yusof Abd Rahman, Mokhtar Abdul Razak, Abibullah Samsudin, Sharina Ramli and Normala Embi, who had all sought to challenge the suit.
Jamil Khir, who was named as the first defendant, has not sought to challenge the suit.
On February 7 last year, the Kuala Lumpur High Court struck out Pemangkin’s suit on the basis that it was frivolous, vexatious and an abuse of the court process.
The YaPEIM scandal was initially raised in 2015 by director of the National Oversight and Whistleblowers (NOW) Akmal Nasir.
The Johor Baru MP said that Yapeim had spent RM223,000 for the Rompin parliamentary by-election.
On November 13, 2015, Akmal also alleged that Yapeim funds totalling RM411,000 meant for charity work was misappropriated by Jamil Khir to pay for his travels, golfing activities and visits to shopping malls.
A day later, Akmal corrected his earlier alleged amount, saying that the amount spent was actually RM590,000.
He also said YaPEIM had spent RM290,000 to organise a marriage course in Paris which was officiated by Jamil Khir.
The report sighted by The Malaysian Insight also revealed that YaPEIM is in the midst of a revamp and restructuring of its roles to increase transparency within the organisation.
The Malaysian Insight has sought a response from YaPEIM on the findings of the confidential document and is awaiting a reply from it.
“YaPEIM is improving its policies and methods of decision-making, for example, the management can now only use 20% of all charity donations to fund the cost of managing YaPEIM.
“The rest must be spent on charity and investments,” said the report.
Yapeim was created in 1976 under the Trustees (Incorporation) Act and is similar to a charity trust fund.
However, YaPEIM is not an ordinary charity trust fund as it is supported by the government with the prime minister as its patron, who delegates a minister in the Prime Minister’s Department, normally in charge of Islamic affairs, to oversee the organisation.
YaPEIM is managed by its president, deputy president and a board of trustees whose members are appointed by the minister.
It participates in various economic activities, including running supermarkets, gold trading and in real estate with part of the profits used to fund welfare programmes. – TMI