Koperasi Pegawai-Pegawai Melayu Malaysia Berhad (MOCCIS) was formerly known as the Malay Officers Investment and Credit Cooperative Society. They were established in the 1934 with the experience in the investment field. MOCCIS is a cooperative body that majors in investment for the Malay officers in the government sector, as well as the private sector. Their main focus was to help themselves to help others with financial problems, in exchange of Malaysia’s economic growth. Not only did the organization gain profit from membership fees, loans and borrowings from financial institution, they have also evolved themselves into subsidiaries and joint ventures that engrossed in oil palm plantations, real estate, sale of goods through installment of Murabaha and etc.
The deal about business investments is that there will never be a constant escalation; when there is gain, there will be loss. Unfortunately this applies to MOCCIS who fails to come clear with the employees’ salaries and refund shares and fees to its members. MOCCIS has announced bankruptcy and is placed under the administration of Rakyat Asset Management Sdn. Bhd. by SKM in 2008 (Utusan Malaysian 2008). Since the early 2000s the organization have been receiving numerous complains on members unable to withdraw their money. The question here is what happened to MOCCIS? Debt. MOCCIS is in debt with over RM78 million along with a negative cash flow (Utusan Malaysia 2008).
So the next question would be, why is MOCCIS in debt? As the organization is under the support of government, the members had a hard time believing the news when the problem arose. I believe that this may be the reason of bad investments and the failure to collect down payments they have made. The huge fail investments made by the organization started way back in 1997. Losses were made in the boutique hotel in Pulau Langkawi, Silicon Vision International Corp and Telekom Advance System investments; RM10.1 million, RM2.2 million and RM1 million respectively (Utusan Malaysia 2006). To top it of, MOCCIS has also made faulty down payments without getting any agreements in back and white. Companies that refused to refund these deposits are Isuta Sdn. Bhd., United Mal Jap Air Conditioning and to an individual named BT Chan; each truant with RM13.6 million, RM3.3 million and RM1.3 million accordingly (Utusan Malaysia 2006). For that being said, MOCCIS is in a total debt of approximately RM109.5 million.
As stated previously that the government supports MOCCIS, and so a soft loan was given to the organization as a sign of compassion. A total of RM78.2 million was given as a soft loan by the government to settle its debts; sadly it was not enough to cover the organization’s business affairs. Nevertheless, MOCCIS has gradually gotten back on track in 2009 when Bank Rakyat took over. Bank Rakyat had given the organization a time frame of 5 years in repaying theirs debts and refunds to their ex-members with the help of providing new recruited members, reactivated its loan scheme and financing of RM50 million. With that being said, it seems that the organization is indeed fortunate to still hold a certain level of worthiness to be receiving much support from all.
Analyzing the financial scandal of MOCCIS has shown some bad examples of business practices and management. From my opinion, I think there is a fair chance for MOCCIS to avoid such affliction; or at least to manage the scandal in a more effective and efficient manner. According to the news article from Utusan Malaysia 2008, the reason MOCCIS has gone into such circumstances is from bad investments and the misapprehension of down payment made, causing the organization in debt. No doubt investments are always at risk but how did the error occur while putting up the deposit? Did MOCCIS study the particular company before making any decisions? Research should be carried out and done properly before jumping into conclusion. Background check and financial statuses of the particular company as well as the receiving person should be scanned thoroughly to prevent any mishap.
On the side note, even with Bank Rakyat stating 5 years of time frame for MOCCIS to repay the employees and ex-members, there are still misguided souls out there waiting for an answer.
The deal about business investments is that there will never be a constant escalation; when there is gain, there will be loss. Unfortunately this applies to MOCCIS who fails to come clear with the employees’ salaries and refund shares and fees to its members. MOCCIS has announced bankruptcy and is placed under the administration of Rakyat Asset Management Sdn. Bhd. by SKM in 2008 (Utusan Malaysian 2008). Since the early 2000s the organization have been receiving numerous complains on members unable to withdraw their money. The question here is what happened to MOCCIS? Debt. MOCCIS is in debt with over RM78 million along with a negative cash flow (Utusan Malaysia 2008).
So the next question would be, why is MOCCIS in debt? As the organization is under the support of government, the members had a hard time believing the news when the problem arose. I believe that this may be the reason of bad investments and the failure to collect down payments they have made. The huge fail investments made by the organization started way back in 1997. Losses were made in the boutique hotel in Pulau Langkawi, Silicon Vision International Corp and Telekom Advance System investments; RM10.1 million, RM2.2 million and RM1 million respectively (Utusan Malaysia 2006). To top it of, MOCCIS has also made faulty down payments without getting any agreements in back and white. Companies that refused to refund these deposits are Isuta Sdn. Bhd., United Mal Jap Air Conditioning and to an individual named BT Chan; each truant with RM13.6 million, RM3.3 million and RM1.3 million accordingly (Utusan Malaysia 2006). For that being said, MOCCIS is in a total debt of approximately RM109.5 million.
As stated previously that the government supports MOCCIS, and so a soft loan was given to the organization as a sign of compassion. A total of RM78.2 million was given as a soft loan by the government to settle its debts; sadly it was not enough to cover the organization’s business affairs. Nevertheless, MOCCIS has gradually gotten back on track in 2009 when Bank Rakyat took over. Bank Rakyat had given the organization a time frame of 5 years in repaying theirs debts and refunds to their ex-members with the help of providing new recruited members, reactivated its loan scheme and financing of RM50 million. With that being said, it seems that the organization is indeed fortunate to still hold a certain level of worthiness to be receiving much support from all.
Analyzing the financial scandal of MOCCIS has shown some bad examples of business practices and management. From my opinion, I think there is a fair chance for MOCCIS to avoid such affliction; or at least to manage the scandal in a more effective and efficient manner. According to the news article from Utusan Malaysia 2008, the reason MOCCIS has gone into such circumstances is from bad investments and the misapprehension of down payment made, causing the organization in debt. No doubt investments are always at risk but how did the error occur while putting up the deposit? Did MOCCIS study the particular company before making any decisions? Research should be carried out and done properly before jumping into conclusion. Background check and financial statuses of the particular company as well as the receiving person should be scanned thoroughly to prevent any mishap.
On the side note, even with Bank Rakyat stating 5 years of time frame for MOCCIS to repay the employees and ex-members, there are still misguided souls out there waiting for an answer.
The above images were taken down from the MOCCIS’s Facebook page. These screenshots clearly show that the users “Dzulkifli Abd Razak” and “Joe Hyun Bin” are in the state of looking for answers from the organization. Approximately 7 years apart from now, MOCCIS has yet to ensure all employees and ex-members are being informed and updated for their payments. This portrays a worst image on the organization, as it is still not well-equipt in dealing with the crisis. I think MOCCIS should start showing signs in turning over a new leaf to regain trust from the public. By means they should first gather up all necessary information of employees and ex-members that have yet to repay. Next, MOCCIS should take the inneciative to send out apologize emails to everyone of them. In terms of clearing out all debts as soon as possible, the organization should also have a minimum refund of RM100 to everyone, which will also be stated in the email. To ensure all funds are succesfully transferred to the accounts, MOCCIS need to take charge in monitoring the process. Take it as it may, but this monthly routine check should be done earlier when they company begin to have a positive cash flow.
A company’s financial scandal is not meassured by how much the unit that they have lost but how the company handled the issue. In conclusion, old cases as such should be revised and study back again on the mistakes they have made and if they see any chances in preventing the financial scandal in any way. This way companies and organization will have a constant reminder that mistakes are meant to be made but it should not be repeated.
(985 words)
Reference List
1. Kosmo.com.my, (2008). Bank Rakyat mahu pulihkan MOCCIS. [online] Available at: http://www.kosmo.com.my/kosmo/content.asp?y=2008&dt=0305&pub=kosmo&sec=Negara&pg=ne_09.htm [Accessed 16 Apr. 2015].
2. Lim, Y. (2012). MOCCIS to pay 2% dividen: Ismail Sabri. The Star, [online] p.1. Available at: http://www.thestar.com.my/News/Nation/2012/03/27/MOCCIS-to-pay-2-dividend-Ismail-Sabri/ [Accessed 16 Apr. 2015].
3. Utusan Malaysia, (2008). Bank Rakyat ambil alih MOCCIS. [online] p.1. Available at: http://ww1.utusan.com.my/utusan/info.asp?y=2008&dt=0301&pub=Utusan_Malaysia&sec=Dalam_Negeri&pg=dn_11.htm [Accessed 16 Apr. 2015].
4. MOCCIS BERHAD, (2013). Koperasi Pegawai-Pegawai Melayu Malaysia Berhad (MOCCIS). [online] Available at: http://moccis.org.my/ [Accessed 16 Apr. 2015].
5. Facebook, (2010). MOCCIS BERHAD. [online] Available at: https://www.facebook.com/MOCCISBHD [Accessed 18 Apr. 2015].
A company’s financial scandal is not meassured by how much the unit that they have lost but how the company handled the issue. In conclusion, old cases as such should be revised and study back again on the mistakes they have made and if they see any chances in preventing the financial scandal in any way. This way companies and organization will have a constant reminder that mistakes are meant to be made but it should not be repeated.
(985 words)
Reference List
1. Kosmo.com.my, (2008). Bank Rakyat mahu pulihkan MOCCIS. [online] Available at: http://www.kosmo.com.my/kosmo/content.asp?y=2008&dt=0305&pub=kosmo&sec=Negara&pg=ne_09.htm [Accessed 16 Apr. 2015].
2. Lim, Y. (2012). MOCCIS to pay 2% dividen: Ismail Sabri. The Star, [online] p.1. Available at: http://www.thestar.com.my/News/Nation/2012/03/27/MOCCIS-to-pay-2-dividend-Ismail-Sabri/ [Accessed 16 Apr. 2015].
3. Utusan Malaysia, (2008). Bank Rakyat ambil alih MOCCIS. [online] p.1. Available at: http://ww1.utusan.com.my/utusan/info.asp?y=2008&dt=0301&pub=Utusan_Malaysia&sec=Dalam_Negeri&pg=dn_11.htm [Accessed 16 Apr. 2015].
4. MOCCIS BERHAD, (2013). Koperasi Pegawai-Pegawai Melayu Malaysia Berhad (MOCCIS). [online] Available at: http://moccis.org.my/ [Accessed 16 Apr. 2015].
5. Facebook, (2010). MOCCIS BERHAD. [online] Available at: https://www.facebook.com/MOCCISBHD [Accessed 18 Apr. 2015].