KUALA LUMPUR (November 24): The independent consultant appointed to review the financial management of some investments and projects of Cahya Mata Sarawak Bhd (CMSB) highlighted several key findings, including the existence of gaps in contract management processes , which contributed to the losses of the project.
In a file filed with the stock exchange, the group said that KPMG Management & Risk Consulting Sdn Bhd also noted a lack of oversight by the partner’s board of directors over hedging transactions for a certain project. which resulted in losses due to unfavorable currency movements.
Its review also found that there was a lack of due diligence and stakeholder management on the risks of a project’s joint venture partners and that the reporting structures from management to the board were not respected and respected in a project, said the CMSB.
The group said realized losses incurred had been recognized in past financial results.
“Based on the main findings above, an external lawyer has been appointed to review the various issues that have arisen and to advise CMSB on all legal issues that arise, in particular with regard to the conduct of the senior management at that time, ”the group said.
CMSB said its board has taken immediate steps and action over the past few months to strengthen the group’s operations and processes, which includes a review of reports and a realignment of the group’s structure, in the aim of ensuring that internal controls and risk assessment processes are strengthened, including the promotion of transparency and accountability.
He said that board-level risk oversight is strengthened to provide oversight of material business risks and provide updates on key projects periodically, so that the board is informed of these matters on an ongoing basis.
The group will have an independent group risk division to lead the organization’s risk management plan, he said, adding that a culture of governance and growth will be actively pursued to strengthen accountability and integrity at all levels of senior management.
CMSB intends to make operational improvements such as project tendering processes, tightening project cost control and strengthening project management.
Additional senior managers will be recruited, including a risk manager, a technical manager, a compliance manager and a chief of staff.
CMSB will also set up an investment committee, chaired by the group’s CEO, to review and recommend all proposals and investments to the board of directors for information and approval.
The reporting process will be improved by investing in an enterprise resource planning system to streamline the flow of information and data, he said.
The group will also appoint a new group chief financial officer with the necessary skills and experience, although Tan Mei Fung will continue to lead finance, pending the end of the appointment.
On August 30, CMSB announced the ongoing judicial investigation of Syed Hizam Alsagoff into allegations of financial mismanagement, following a review of the financial management of certain investments and past contracts.
Syed Hizam had been suspended since May to facilitate the investigation.