KUALA LUMPUR (July 10): Human Resource Development Corporation (HRD Corp) is permitted under the current law to invest its funds, Human Resources Minister Steven Sim Chee Keong said on Wednesday.
The HRD Corp investment panel “may, from time to time, invest the fund or any part thereof that is not immediately required”, according to Section 27 of the Human Resources Development Act 2001, Sim noted when winding up his debate in the Dewan Rakyat on the Auditor General’s Report 2024.
Of the RM3.77 billion utilised by HRD Corp for investment, Sim said 84% was allocated to low-risk investments, such as cash, deposits, bonds, sukuk and trust accounts, with the remainder invested in equities.
“The investment panel also employed put and call options as a ring-fence against market volatility, to ensure capital preservation,” said Sim.
HRD Corp, supervised by the Ministry of Human Resources, is responsible for collecting levies from key industries and disbursing training grants to registered employers through the Human Resources Development Fund (HRDF).
HRD Corp made gains despite some risky investments
HRD Corp had recorded investment gains of RM82 million in 2020, RM71 million in 2021, RM90 million in 2022 and RM176 million in 2023. As of June 2024, investment gains have totalled RM91 million against the target of RM180 million, Sim said.
On pre-tax profits, HRD Corp recorded RM25.8 million in 2020, RM12.1 million in 2021, RM29.8 million in 2022 and RM97.5 million in 2023, he added.
Sim’s remarks follow reports issued by the Auditor-General and the Public Accounts Committee (PAC), which highlighted a series of mismanagement and unusual transactions that included suspicious disbursements, dubious property deals and risky investments.
The auditor general last week flagged suspicious disbursement of training grants totalling RM51.69 million to some 3,700 individuals who attended training multiple times under the Gerak Insan Gemilang scheme. More than 200 participants were flagged for identical names and identification numbers.
The PAC also held its own investigations into HRD Corp and found that the company had been utilising a significant portion of the levy it had collected from companies for risky investments. The bipartisan parliamentary committee also found that HRD Corp had engaged in several dubious property deals.
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