The Center to Combat Corruption and Cronyism (C4) views with great interest the recent announcement by Selangor Menteri Besar Azmin Ali to set up A state investment firm, Darul Ehsan Investment Group (DEIG) Sdn Bhd.
The surprise move suggested the need to strengthen state assets and restructure all government-linked companies under MBI.
C4 urges:
1. For the MB to provide Selangorians more detailed explanations on the need and rationale of establishing such an entity, although at first glance, such roles seem to be already covered by the MBI and other state agencies, and if another such entity is justified. Would it lead to overlapping of tasks, duties and responsibilities? How will he ensure that it will not create another bureaucratic burden?
2. For the MB to provide a break down of the legal framework for such an entity to account for its roles and responsibilities.
C4 Concerns:
1. Having a free rein to manage the state’s RM6.3 billion assets, without being subjected to law, nor being answerable to the state legislative assembly, is cause for concern. Making external loans outside of the state legislative assembly’s knowledge should never be a precedent for Selangor, and hence the DEIG must get its endorsement and authority from the State Assembly in order to execute its mandate with integrity.
2. The governance structure of the DEIG spells danger and comes with several glaring loopholes. If anything must be learnt from the 1MDB crisis, the principles of governance, openness and integrity must reflect the legal prerequisites of the DEIG and must not and cannot only be reflected as a responsible to its board of directors.
3. There must be transparent rules in the way companies and Government Linked Companies (GLC)s do business under the DEIG. Will it insist on open tender policies? Will it allow for direct negotiation? And under what circumstances?
We are further surprised to learn that the proposal for the set up of the DEIG was not earlier raised in the state assembly as claimed by both the Pakatan and BN opposition assemblymen.
Everyone is familiar with the maxim, “absolute power corrupts absolutely”. That would be the eventual outcome of concentrating power in the hands of a few instead of being accountable to the people.
Therefore, to prevent a repeat of the 1MDB scandal, we urge the Selangor MB to:
Establish an Ombudsman Office for Good Governance to provide essential oversight onto the DEIG, and its operations.
This will ensure the highest forms of accountability and transparency of Selangor investment and business entities.
Put in place proper audit systems and structure to account for the RM6.3 billion assets that will be managed by the DEIG;
Propose and see to the enactment of state laws that will monitor, review and govern the DEIG to ensure that it is free from abuse of power or corruption;
Ensure, and make it compulsory for DEIG to table its financial reports periodically to the state legislative assembly of Selangor
Restructure DEIG to answer to the state legislative assembly instead of only its board of directors to ensure transparency and accountability of its actions and expenditure;
Put in place an open tender system in procurement and appointment of project partners or implementers so that any possibility of corrupt and crony practices can be avoided.
Now is the chance to prove that Selangor will take on higher standards of governance.
Released By
C4 DIRECTORS
Tan Sri Simon Sipaun
Ahmad Farouk Musa
Cynthia Gabriel
Richard Yeoh
