Auditor General’s Report Issues Not Of Misconduct But Operational, Management Matters: Dep Minister

Rangkaian Hotel Seri Malaysia (RHSM) Sdn Bhd will review its business model in the future so that hotel renovation capital expenditures can be implemented through an appropriate model to reduce dependence on government funds.

On whether the Ministry will take action on audit findings, it is noted that, as reported in the Auditor General’s Report, over the 30 years since RHSM’s establishment, 25 Bumiputera entrepreneurs have been trained and guided in the hospitality industry. Six or 24% of these Bumiputera entrepreneurs mentored by RHSM are still engaged in hotel activities.

By 2012, RHSM had successfully achieved its establishment goals with 18 out of 21 hotels franchised (85.7%), while the remaining 3 hotels are flagship hotels that were not franchised. Currently, the franchise programme has been temporarily suspended due to restructuring plans for RHSM requiring cooperation from all shareholders, Deputy Finance Minister Lim Hui Ying, said in the ministry’s winding up speech relating to Auditor General’s Report 2/2024, specifically on the management of Federal Government companies in the Dewan Rakyat today.

“Additionally, under new management leadership, RHSM has shown improved financial performance and recorded profits in 2022 and 2023 compared to previous years. RHSM management is also actively improving the company’s structure to ensure good governance can be applied in the future,” she said.

Lim explained the audit issues raised in the Auditor General’s Report are not misconduct issues but operational and management issues that will be addressed and improved from time to time.

RHSM is a majority-owned company of Minister of Finance Incorporated (MKD) and supervised by the Ministry of Tourism, Arts and Culture (MOTAC), established on 5 April 1994 to promote Bumiputera entrepreneur participation in the hospitality industry, in line with the Government’s aspiration to increase the number of Bumiputera entrepreneurs in the industrial and trade sectors.

Currently, there are 20 Hotel Seri Malaysia establishments in operation, with 2 of these managed under a franchise arrangement, namely Hotel Seri Malaysia Kangar and Hotel Seri Malaysia Bayan Baru.

In 2023, MOTAC allocated RM5.8 million for upgrading works at Hotel Seri Malaysia Genting Highlands and Hotel Seri Malaysia Kepala Batas.

i2M Ventures Sdn  Bhd

On the issue concerning i2M Ventures Sdn. Bhd., Khazanah did and does not intend to add new investors under i2M Ventures, and i2M Ventures’ function will continue until the end of its agreement with 12 active investors.

Lim said, currently, there are 8 active investors under the Financial Support Agreement and 4 active investors under the Facilitation Agreement. The last investor agreement will expire in 2027.

She added, in 2020, a decision was made to integrate i2M Ventures’ operations with Iskandar Investment Berhad (IIB) and reclassify i2M Ventures from an active operating company to a non-operating company.

i2M Ventures has signed a Service Level Agreement with IIB to administer and take over the administration functions of i2M Ventures to further develop the ecosystem in Iskandar Puteri.

i2M Ventures, through IIB, will continue to monitor KPI achievements and allocate funds to active investors. IIB, as the master developer of Iskandar Puteri, will continue its efforts to promote Iskandar Puteri to ensure the achievement of program KPIs, she said.

“In line with the audit recommendations, Khazanah will review i2M Ventures’ functions after fulfilling all commitments and agreements with investors by 2025,” Lim added.