by AFIQ AZIZ / pic by BERNAMA
MARA Corp Sdn Bhd’s unexpected terminations of its CEO and 20 professionals that he brought with him have raised eyebrows and questions over corporate governance at the Majlis Amanah Rakyat (Mara) business arm.
Last month, the company terminated the employment of CEO Datuk Badlisyah Abdul Ghani and a team that he had assembled to help Mara Corp release value from its assets, just five months into their 24-month contracts last year.
The move has been criticised for its lack of openness and as a sign that the board did not act independently.
Federation of Public Listed Cos Bhd president Tan Sri Megat Najmuddin Megat Khas denounced the move and said there was no justification given for the terminations.
He told The Malaysian Reserve (TMR) that the terminations indicated a lack of independence at Mara Corp’s board after it said it had “limited authority” in deciding the matter.
“I do not understand the rationale behind these terminations. Why did they employ them in the first place and what do they mean by ‘limited’ authority’? Does Mara Corp follow directives from somewhere else?”
Megat Najmuddin said the removal of the CEO and his team should be looked at.
Mara Corp was established in 2016 to manage and develop Mara’s commercial entities under one roof, with assets said to be worth some RM400 million.
In the termination letters sent to Badlisyah sighted by TMR, Mara Corp informed him that his appointment was not budgeted nor approved in accordance with the company’s limited authority. It said the employment of the team was thus not sustainable in terms of their role, as well as financially. “Your position is, therefore, surplus to the company’s requirements.”
Mara Corp director Datuk Suhaili Abdul Rahman, when contacted, refused to comment on the terminations and said the matter will be addressed by top management of the Rural Development Ministry.
It was reported that the terminations of the group’s contracts, which still had 18 months to run, would cost Mara RM10 million in compensation, but Mara Corp said it will only pay each of them one-month salary as stated in their contracts.
It is understood that the group is seeking legal advice on the termination of their contracts and the compensation. Legal experts think they have an argument, even though the compensation is already stated in the contracts.
Employment law consultant Edwin Rajasooria said the group can dispute their contract cancellation and claim damages, if they have been wrongfully dismissed.
Rajasooria said if the court finds an element of wrongful dismissal, Mara Corp will have to award the balance contract sum to the employees.
This is because the employment agreement is deemed as a fixed-term contract whereby Mara Corp employed the workers for a specific period of time.
Rajasooria said, typically, the circumstances of termination are attributed to misconducts such as breach of procedures, unsatisfactory performance after enough training, retrenchment and redundancy raised.
“But I have not encountered this kind of reasoning (as raised by Mara Corp) before because that was not the workers’ responsibilities.
“When you issue the letter of a contract, either it’s budgeted or the company has the authority or not, that is between the management and the company itself.
“But as far as the workers are concerned, it is an official letter, hence they have to honour the letter. This is general company law,” he told TMR.
Former Mara Corp chairman Akhramsyah Muammar Ubaidah Sanusi said the company had around RM18 million of profit in 2019, with dividend expected to go to Mara Corp and its subsidiary.
“So the ‘not-budgeted for’ was not logical nor reasonable, assuming that the 2019 dividend went to Mara Corp as it is supposed to,” said Akhramsyah, who left the company in March 2020.
Read our previous report here