DECEMBER 9 — The Tunku Abdul Rahman University College (TARUC) issue has now become the interest of national debate with many versions and much spin surrounding the funding or rather the renouncement of funding for this institution which had been established way back on February 24, 1969 as a non-profit, private university college in Malaysia. One must be familiar with history to comprehend that TARUC was founded on the purest intention by the Malaysian Chinese Association (MCA) on the sole basis to provide accessible and affordable tertiary education to those average lower income Chinese families who fell outside of the quota system to get into the local public universities but could not afford to send their children overseas.
Currently, the hottest issue plaguing this prestigious institution is that TARUC sits on an astounding cash reserve in the value of about RM634 million and MCA is making hay by asking for Government grant and public donation. Last weekend at the party’s annual general meeting, the chairman of the TARUC Board of Governors, Datuk Seri Liow Tiong Lai, held a special briefing to lay bare the TARUC issue and cover all allegations including the cash reserves, and its ownership.
Let me address the cash reserve issue. Yes, TARUC has a healthy cash reserve but this was built up through 50 years of prudent management and investment by the Board of Trustees of TARUC Education Foundation and Board of Governors of TARUC. Since the 1970s, TARUC started annual building fund raising to seek money for buildings and campus expansion and these public donations, including from eminent philanthropists, were carefully safeguarded and invested by TARUC to grow it “nest eggs” that together with prudent management, created a healthy RM634 million cash reserve today.
So what if TARUC has hundreds of million in cash? How many universities in Malaysia, public and private, can boast of such a fine management that created such a healthy state of finance? And it must be impressed upon that this healthy reserve was preserved, and enhanced, while TARUC consistently maintained affordable education for ALL. To borrow the AirAsia tagline, Now Everyone Can Fly, TARUC embodies the tagline, Now Everyone Can Get Higher Education.
The TARUC management with its commendable foresight built on this cash reserve over the past 50 years with the objective of using this fund for expansion. This would be the fund pool that TARUC would dip into when it needs to add new buildings to expand the capacity of TARUC campuses or even build new campuses. TARUC needs the flexibility to have the financial capacity to expand whenever the needs arise and not have to withhold from expansion plans when the time comes. And let us all common Malaysians not forget that TARUC is a private institution and unlike other public universities, DOES NOT have the luxury of government hand outs or assistance when it comes to expanding and “upgrading”.
As a private institution and one that is still in its quest to become a full fledge world class research university, it has much to upgrade not only in terms of hardware (buildings/facilities/equipment) and also its software (human capital), and needless to say, all of this cost money. A lot of money. In fact this RM634 million reserves in all of its value, pales significantly in comparison to the amount required and expected in reality to develop a blue-blood prestigious research university, like the American Massachusetts Institute Technology (MIT), that TARUC espouses. To attract world class researchers and fund frontline ground breaking research undertakings, TARUC must have money, lots of it.
Additionally, this cash reserve also ensures TARUC’s ability to continue as a business entity under adverse conditions. As Tan Sri Lau Yin Pin, a member of the TARUC Board of Trustees puts it, the management needs over RM100 million a year to pay staff salaries alone at the university. TARUC’s operating expenditure has been increasing exponentially annually, rising from RM140.3 million in 2013 to RM232 million in 2018.
As a registered business under the Companies Act 1965, TARUC is regulated by the Companies Commission of Malaysia (SSM). In fact, besides being regulated by SSM, TARUC is also closely regulated by the Ministry of Education, Ministry of Domestic Trade and Consumer Affairs, as well as the Ministry of Finance. In fact, TARUC is much more heavily scrutinised by government agencies and Ministries than any other university in Malaysia. What’s more, its accounts are audited to international accounting standards annually and submitted to SSM without fail, mandatory in fact.
Somehow, ignorance seems to prevail and there is much false perception that MCA can dip into the TARUC Education Foundation’s fund whenever it needs. This is mere political spin as the foundation’s money can only be used by TARUC for its operational and developmental needs. This money cannot be, say distributed among all MCA members, even if the TARUC Board of Governors decides to close down TARUC. Under the TARUC charter, the institution may only be transferred to another party approved by government, and specifically approved by the Inland Revenue Board.
It is highly unusual that TARUC is now subject to so much political scrutiny when it had been so strictly regulated previously and even more so now with the change in the administrative regime. For those unacquainted, the TARUC’s 14-member Board of Governors include the five representatives from the Government, specifically from the Ministry of Finance and Ministry of Education serving as watchdogs in the interest of the Government.
Apart from these five Government appointees within the Board of Governors, which see to the day-to-day operations and management of the institution, there is also two other independent members within this Board being the President of The Federation of the TARC Alumni Associations and also the President of the Tarcian Alumni Association (TAA), serving as watchdogs in the interest of the institution. Let me highlight here that the TAA representative is none other than Datuk Yap Kuok Fong, whose NGO was given a RM40 million allocation by the government for political reasons.
Given this eminent panel of custodians, if at all there was any mismanagement or any failure in the duty of its members to exercise prudent discretion in all its decisions and undertakings when it comes to TARUC’s operations, as well as in the expenditure of the hotly contentious matching grant received from the Government annually, then I am certain everyone of this 14-member board would have been called to task and held to account including those from the two ministries and Datuk Yap Kuok Fong as well.
Therefore, if there was any issue with TARUC’s management for the past 50 years, these government representatives would have highlighted it. Yet, when TARUC continued to receive its matching grant under the previous government, there was no undue concern or objection from the government representatives. Furthermore it is rather exemplary how financially meticulous the Board of Governor members were in the past years, so much so that TARUC managed to accrue a nest egg for impending future expansions plans.
So let’s all stop denying the fact that yes, MCA with its great foresight founded TARUC for the lower income Malaysians and yes, MCA was also astute and shrewd enough to place the running and management of TARUC into the hands of professionals, building it up from that one red brick into an academically prestigious and highly acclaimed tertiary institution it is today. Yes, indeed TARUC has come a long way from being a mere college existing with classroom on loan by other schools and growing into the prestigious university college that boasts today of five campuses dotting the country, including Sabah.
It is rather disheartening how this matching grant has now become a political pawn in the Minister of Finance, Lim Guan Eng’s personal quest to get one up on MCA. And to browbeat the matter further, the Government or rather Lim Guan Eng has now reportedly provided RM40 million to TARUC through TAA, conditioned on MCA “letting go” of TARUC.
What is the distinction between “matching grant” from the government and the recent Lim Guan Eng’s RM40 million allocation to TAA. Money is money right, you may say. Let me explain why that the RM40 million allocation is not the same as matching grant. Originally, the TAR College’s matching grant was stated in a special instrument presented by the then Education Minister Tun Hussein Onn to Parliament on August 22, 1972 to commit the government’s “dollar for dollar” support for TAR College to realise and deliver affordable education to all Malaysians.
When TAR College was upgraded to a university college in 2013, the Cabinet committed to give the institution up to a maximum of RM60 million as endorsed by the Federal Government via its Cabinet meeting on December 5, 2012 and the Special Instrument presented on 1972 thereafter was revoked.
Therefore, TARUC’s matching grant is a legally binding contract by the government to aid the institution directly and for past five decades, TARUC had received RM1.353 billion grant in total, the last being RM30 million allocation provided in Budget 2018 but the matching grant subsequently was withheld by Lim Guan Eng when the new government took over Putrajaya. Since then, Lim Guan Eng as Minister of Finance played political football with the lives of 28,000 students nationwide by totally cutting off grant for operational expenditure and slashing development expenditure to RM5.5 million under Budget 2019 and to RM1 million in Budget 2020.
By law, any financial aid to TARUC — whether in the form of a matching grant or even allocation — must be given directly to TARUC and not through a third party even if the latter was established as a foundation for welfare of TARUC. The government, above all, should not be seen as making a “backdoor reverse takeover” of TARUC through an NGO or foundation because it cannot use the TARUC’s name, acronym and logo which are the registered trademarks of its owners. It is so wrong for the government to portray its new foundation as representative of TARUC to take over the role of its legal owners, more so when the owners had registered their trademark. Where is the government’s respect for copyright, and by its current action, it had created confusion to the people as well.
TARUC is accountable for every sen of matching grant that it receives directly from the government which will be reflected in its accounts. Even if TARUC receives the RM40 million from TAA, the accounting treatment now would reflect an NGO donation for which the TAR Education Foundation may issue a tax-exemption receipt. But whether or not TAA will make this donation to TARUC remains to be seen, hence the public must vigilantly hold TAA and Lim Guan Eng accountable for this RM40 million out of budget allocation from taxpayers.
Invariably, TARUC’s predicament to make ends meet remains unresolved. In short, the contractual obligation of the Federal Government to TARUC remains unfulfilled.
The distortion and melodramatisation of the whole TARUC palaver by the Minister of Finance has somewhat irked the common people so much so even the common petty traders are now raising funds for TARUC. And this dissent has somewhat translated into the dire defeat of the PH government in the recent Tanjung Piai by-election. The affordable and quality tertiary education provided by the prestigious TARUC is undeniable. So why is Lim Guan Eng bending over backwards trying to fix something that is not broken? As the former Speaker of the US House of Representative, Samuel Rayburn, used to say, “any jackass can kick down a barn but it takes a good carpenter to build one”.
* Pamela Yong is the Deputy Chairman of the Institute of Strategic Analysis and Policy Research
** This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail