The recently released CMI Annual Report (April 2024-March 2025) shows that its scandal-hit Malaysian operations are affecting the UK based charity. According to the report (P.34) “Overall CMI went from a net profit of GBP952,000 in 2024 to a net loss of GBP218,000 in 2025 – the excess tax liabilities of the Malaysian enterprise rose from GBP4,000 to GBP22,000 which was 10% of the total net loss.
Malaysian net losses are due to the repayment of accrued taxes CMI failed to pay (p.43). Malaysian tax recorded is GBP8,000 on profit of GBP35,000. However, this profit is “artificial” because CMI Malaysia charged CMI UK GBP400,000 for GBP365,000 of costs. These are all inter-company (internal transactions).
In addition, the Malaysian subsidiary paid an enormous amount of tax, GBP22,000 tax on GBP35,000 profit in 2025. CMI should have only paid 24% tax or GBP8,400 which is what is reported at Note 23. Thus, CMI paid more than 2.5 times the required tax, which suggests an unreported event (such as a Malaysian tax audit), where outstanding tax not paid in previous years are now being repaid under some sort of arrangement. This issue was not clarified in the financial accounts, nor auditors report.
CMI Malaysia
CMI Management and Leadership Sdn Bhd, is a wholly owned subsidiary of the CMI, registered in Malaysia, is used for on the ground support in the Asia Pacific region on behalf of the Charity. During the year, CMI Management and Leadership Sdn Bhd generated an operating profit of £35,000 (2024: operating profit of £11,000) (see P. 30). However, this was created through internal accounting with CMI UK.
Income (comes from the UK) went down GBP40,000. Cutting expenditure GBP56,000 to push up profit by GBP16,000 and tax paid by GBP18,000 more. Net income down GBP2,000 assets fell GBP485,000 to pay liabilities down GBP498,000 but still have outstanding liabilities of GBP761,000, which is only a GBP13,000 less than 2024.
The annual report confirms sales from partners in Malaysia are contracted with the Charity in the UK and the role of CMI Management & Leadership Sdn Bhd is limited to providing a modest support operation on the ground in Malaysia on behalf of the Charity. In 2024/25, CMI Management and Leadership Sdn Bhd charged £400,000 to the Charity for its operating costs (2024: £441,000). This raises a number of questions concerning tax liability in Malaysia. It appears attempts were made to avoid these taxes during previous years trading.
CMI Malaysia actually has no direct customers. All contracts are with CMI UK.
The subsidiary is in an insolvent position, and the ability for it to continue as a going concern is reliant upon the continued financial support by CMI UK. The Charity must continue to support the subsidiary financially for the foreseeable future. Refer to note 25 for further information on related party transactions. There are questions about where funds in CMI Malaysia have actually gone and whether such payments were ‘franked’.
During the year, the CMI UK paid £365,000 (2024: £425,000) of expenses on behalf of CMI Management and Leadership Sdn Bhd and was recharged £400,000 (2024: £441,000). At 31 March 2025 the amount due by CMI Management & Leadership Sdn Bhn to the Charity was £699,000 (2024: £1,183,000). A provision for doubtful debts of £699,000 (2024: £788,000) has been made against this balance.
However, this GBP699,000 is GBP65,000 lower than the liabilities at Note 21 suggesting that the Malaysian company now has debts to another organization, not just CMI UK. There needs further explanation on the matter of who are other creditors of CMI.
Finally, note 9 in the annual report states GBP 679,060 are tax losses as at March 31, 2025. With the revenue going straight to the UK, this figure could be interpreted as expenses, rather than losses. The report states that the ‘deferred tax asset has not been recognized in respect of these losses as it is not considered probable it will be recoverable against future trading profits in the foreseeable future”. This comment raises many alarming issues. There seems to be a change from report to report of how these funds are classified. The auditor should have raised a red flag on this issue.
Other Debtor Issues
In the balance sheet, CMI have recorded debtors at GBP 40,950,000, where debts of GBP 21,406,000 are more than one year old and questionable as to whether these can be collected. The Malaysian company debt owed to the them rose by GBP304,000 or 77% higher at GBP699,000 and is considered unrecoverable/doubtful debt not included in total potential payments.
CMI wrote-off GBP476,000 of debt due from the Malaysian company – probably by finally using the fee income from Malaysia as revenue not accumulated debt as they were doing in the past to avoid taxes.
The quality of CMI debtors is put into further question with CMI Enterprises Ltd. The Charity trades with its wholly owned subsidiary CMI Enterprises Limited. Any profits made by CMI Enterprises Limited are transferred to the Charity under the Gift Aid Scheme subject to sufficient distributable reserves. £104 has been donated to the Charity under gift aid for the financial year (2024: £107). During the year, CMI Enterprises Limited purchases from the Charity amounted to £25,000 (2024: £18,000) and the Charity made a Management Charge of £23,000 (2024: £89,000) to CMI Enterprises Limited. At 31 March 2025 the amount due by CMI Enterprises Limited to the Charity amounted to £88,000 (2024: £13,000). A provision for doubtful debts of £88,000 (2023: Nil) has been made against it. This provision reflects management’s best estimate of the extent of recovery.
The prudency of the above transactions is questionable, where debtors with a doubtful ability to pay have been allowed to be created by CMI.
Finally, the annual report has failed to make any mention to two cases now in front of the High Court Malaysia. The potential liability exposure to CMI could be in excess of GBP 6.0 million. This should have been mentioned.
Unfortunately, the 2024-2025 CMI annual report brings up more questions than it answers in Malaysia. It looks like a financial mess where something is being covered up.
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