by P PREM KUMAR & DASHVEENJIT KAUR / graphic by TMR

The National Audit Department (NAD) has reprimanded two Ministry of Finance Inc (MoF) companies, Cyberview Sdn Bhd and Malaysia Venture Capital Management Bhd (Mavcap) for operational weaknesses.

In its Auditor-General’s (A-G) Report 2016 Series 2, which was tabled in the Dewan Rakyat yesterday, Cyberview lost over RM4.2 million in rental incomes after the occupancy at its CV12 and CV12A building in Cyberjaya, fell below 50%.

The audit report also found that Cyberview, Cyberjaya’s master developer, still has RM27.44 million in unused government grants and has no plans to utilise the fund.

The NAD has proposed to Cyberview to study ways to increase the occupancy rate at its buildings and should even consider to dispose of the CV12A to half any further losses.

“Cyberview also should secure approvals from the MoF to utilise the excess grants which have not been put to use, if necessary,” said the report.

Cyberview was also censured for failing to have adequate independent directors as suggested by the best practices under the Malaysian Code on Corporate Governance 2012.

“All Cyberview audit committee members have no expertise in accountancy, and meetings were also not held at least four times a year.

“Setting of Cyberview’s key performance indicators was also delayed by the board of directors,” according to the report.

The NAD has proposed to the MoF to ensure board members with accountancy experience are appointed to the company’s audit committee.

The ministry should also ensure the majority of directors in Cyberview are independent directors (more than 50%) as the chairman is non-independent.

Treasury Secretary General Tan Sri Dr Mohd Irwan Serigar Abdullah is Cyberview chairman.

Meanwhile, the A-G Report said Mavcap has failed to reach the optimum investment financing in the country’s venture capital (VC) sector.

Mavcap also did not adhere to fund utilisation terms and conditions under the 10th Malaysia Plan (10MP). Mavcap was allocated RM130 million for Mudharabah concept direct financing and RM70 million for VC in Asean (OSP3).

“Mavcap has invested RM193.88 million in corporate VC and OSP3, which are not under Mudharabah concept,” according to the report, adding that the change in investment structure did not receive written consent from the Finance Ministry.

Between 2007 and June 2017, Mavcap only managed to repay RM337.29 million from its loan of RM450 million under the 8MP. The loan was supposed to be fully settled in 2011.

“The failure of Mavcap to repay according to schedule have resulted in accumulated late charges and penalties of RM85.85 million.”

The NAD has suggested Mavcap to optimise funds provided by the government in order to reach objectives set under each Malaysia Plan, in line with the national VC sector’s growth.