KPT investigates CMI Malaysia selling non-accredited certificates, collecting millions in fees, declaring tax evasion losses
Translated from CorpatSecret June 12 2024
Professor Geoffrey Williams' critique
After the disclosure of Professor Geoffrey Williams, Dean of the Institute of Graduate Studies at the Malaysian University of Science and Technology (MUST) who is also a columnist for Free Malaysia Today on February 26, about the scandal of the sale of non-accredited certificates by an Association of Certified Management Institutes belonging to the Chartered Management Institute (CMI) based in the UK causing the institute was investigated by the Ministry of Higher Education (KPT). Also commenting on it is Murray Hunter, a well-known journalist who currently resides in Thailand.
According to Professor Geoffrey Williams, despite being born in the United Kingdom, he is not convinced that British people are good at management. He said poor management and leadership is common in organizations in the UK. A study by the Chartered Management Institute (CMI) itself, the leading management training organization in the UK, shows that 82% of new managers in the UK are "accidental managers".
These are people who hold management positions without formal qualifications in management and leadership or experience. They are not trained or equipped to manage and often have no interest or inclination to do so.
CMI is a charity that aims to tackle inadvertent managers. Its wholly-owned subsidiary is involved in “commercially selling student enrolments”, according to the 2023 Annual Report. These enrolments lead to UK-accredited certificates with little additional training, assessment or involvement.
CMI has 5,000 members in Malaysia with 4,000 in 21 CMI higher education partners various HEIs. Its subsidiary reportedly owed RM4.7 million (£788,000) to UK charities last year which has been recorded with provisions for bad debts.
Many members are asking whether the millions of ringgit that Malaysians regularly pay to CMI is worth the cost.
Is it true that CMI Malaysia 'Sells non-accredited certificates'?
Because of that writing, the Chartered Institute of Management and its subsidiary in Malaysia filed a defamation suit against Professor Geoffrey Williams and renowned journalist 'Murray Hunter'.
Is it true that CMI Malaysia 'sells non-accredited certificates' that are not recognized by the Malaysian Qualification Agency (MQA)?
CMI Malaysia said its regional board members – made up of volunteers drawn from industry and higher education, including chief executive officers, directors and deans of several Malaysian universities – were questioned on April 30 over the matter.
Only one Malay Professor from Universiti Malaysia Kelantan is involved as its Board of Directors, namely Prof Dr Roselina Ahmad Saufi
"(CMI) had to issue a comprehensive explanation letter to the ministry on May 2,"
CMI also said Malaysia's partners in higher education had 'chosen to suspend their commercial relationships', putting it at risk of losing £1.5 million (RM9 million) worth of 'business opportunities'.
Representatives from both CMI and its subsidiary, CMI Management & Leadership Sdn Bhd (CMI-ML) also received inquiries from Malaysian partners of various IPTs 'including regarding the potential termination of services'.
It seems that the announcement of nearly RM10 million in business shows that CMI Malaysia is making a profit.
But there is something wrong with CMI Malaysia! This commercial student registration is advertised and sold with a "value added" offer which is part of a collaboration agreement with universities in Malaysia that comes with CMI certificates and qualifications.
“Added value” includes providing course materials and curriculum content, career development tools and advice, job preparation and CV advice, internships, coaching, student networking, interview training, counselling, and other support activities. However, the "added value" was not provided which caused 21 universities and colleges including private universities such as Sunway University, Taylors University, and UNITEN to be dissatisfied. These include subsidiaries of UPM Putra Business School, Universiti Utara Malaysia, and Universiti Malaysia Kelantan.
If around 4,000 students pay approximately RM1,500 for membership and 1,000 members who are not students but pay a similar annual fee of RM1,500 for the same package and at least 5,000 members means a collection of approximately RM7.5 million.
However, CMI Malaysia and its subsidiaries were announced as loss-making companies. More strangely everything was recorded as a debt of RM4.14 million (almost US$1 million) for operating expenses, mainly the salaries of CMI UK staff and was written off as bad debt in August 2023. When checked CMI's subsidiary in Malaysia has no assets, no income, and a loss of RM2 million recorded in the 2023 audit return at SSM.
CMI Malaysia is seen as a tax haven because it only owns RM1 shares controlled by CMI UK with only two directors namely Lucy Greggains, CFO and COO of CMI in the UK and one director namely Narresh AL Veerasingam. Who he is is unknown.
This tax avoidance model ensures that all fees and income from the 5,000 Malaysian members and 21 universities are paid to the UK where they are exempt from tax due to CMI's charitable status. Even in Malaysia, CMI is seen as an association. Only has subsidiaries namely Chartered Management Institute and CMI Management & Leadership Sdn Bhd (CMI-ML)
Money recycled from Malaysia is registered as a loan to CMI Malaysia from income, and when operating costs are deducted, the Malaysian entity records a financial loss each year so that no tax is paid in Malaysia as well.
During the period 2019-2023, CMI did not pay tax on at least US$1 million of recycled income that was registered as a loan and then written off to provide a clean account.
CMI's UK account states that they make a profit from fees paid by Malaysian students and universities. The amount is not disclosed in UK audited accounts but is absorbed into UK income where no tax is paid due to the charity's tax exempt status.
Isn't this a scam?
The university recruits and teaches students for 2-4 years, providing curriculum content, career advice, job preparation, internships, student and networking events, interview training and support services. Students complete university assessments and exams assessed by university faculty. Upon completion of the program, students receive a degree from a university accredited by the Malaysian Qualifications Agency (MQA).
While students pay fees, CMI issues UK certificates without any assessment, teaching, use of CMI course materials, or direct contact with CMI staff or tutors. The fee they pay for the CMI certificate is because the fee has been collected by their university and there is no detailed record in their bill. In addition, CMI follows a policy of compulsory registration and charges for all students enrolled in programs for which certificates will be sold.
The Inland Revenue Board, MACC and KPT were urged to investigate this case. Could there be officials at various levels involved? CMI Management & Leadership Sdn Bhd (CMI-ML) in front of the eyes!. CMI wants to sue whoever it is, they have something. The act of collecting almost RM10 million but not announcing it as a profit in a Malaysian company causes tax collection losses to the government and even fools students who pay fees through public or private universities in Malaysia. Even the UK people are aware of their stupidity in management but the Malaysians have a lot of faith in their old 'colonizers'. Understand 'White People'!.
Originally published in CorporatSecret 12th June 2024
Link:
https://thecorporatessecret.com/blog/2024/06/12/kpt-siasat-cmi-malaysia-jual-sijil-tak-bertauliah-kutip-yuran-berjuta-isytihar-rugi-lari-cukai/?fbclid=IwZXh0bgNhZW0CMTAAAR2U7kVgzvl8rhcDH40uXuBHmWdk7T_wbJgPW_7pOQXHgOJktX8ARY-DuMM_aem_UBbQZvvGjJFn4JigF2EZVA
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