Outcome of my meeting with Chairman of Yayasan NAAM, Datuk M.Saravanan

Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 31st of March 2016

Outcome of my meeting with Chairman of Yayasan NAAM, Datuk M.Saravanan

I would like to thank Datuk M.Saravanan, Chairman of NAAM, for inviting me to the office of NAAM this morning and for giving me a thorough explanation of the activities and programs undertaken by NAAM. Based on our meeting, I take note of the following explanations given:

1) That the RM19m grant given to NAAM was via the Economic Planning Unit under the development expenditure of the budget from the Prime Minister’s Department. RM15m was spent in 2014 and RM4 million was spent in 2015. No additional funds have been allocated to NAAM in 2015 despite the initial announcement that a total of RM37 would be allocated to NAAM.

2) That none of the members of the board of trustees of NAAM, nor its coordinators (“pelaksana”) at the state levels receive any compensation or salary from NAAM. That the rental of NAAM’s office and salaries of clerical staff do not come from NAAM’s allocation from the EPU.

3) That NAAM is a training service provider that does not provide any loans to those which it has trained. That NAAM has spent approximately RM9.6m out of its RM19 allocation in training services provided by 3 companies (including cost of materials) to 1330 people in order to equip them to start their own chili farms.

4) That EPU provided guidelines to NAAM on the type of programs and activities which it can carry out and the proposed budget for each type of program and activity

5) That the Ministry of Youth and Sports has done an internal audit for NAAM.

While it is commended that the chairman of NAAM was willing to explain the details behind its programs and activities, there are still some areas of ongoing concern including:

1) Success rate of those trained to start their own chili farms is still very low

For example, 1330 participants were trained to start their own chili farms but only 129 had started their own chili farms (approximately 10%) due to a variety of factors such as the lack of capital and not having access to land to plant these chilies. Given the amount of funds spent on training these participants (a total of RM9.6m or RM7300 per person), this low conversion rate raises issues about the effectiveness of NAAM’s flagship program of chili farming.

2) The inability of many of these participants to obtain financing to start their own chili farms is also worrying

Out of these 1330 participants, only 11 were successful in obtaining loans from TEKUN to start their own chili farms and the amount they could borrow was RM19,000 whereas the estimated cost of starting a chili farm was given by the chairman at RM40,000. This means that for most of the participants of NAAM’s training program, which comprised of marginalized Indian youth with very little capital, it is almost impossible for them to find the funds to start their own chili farms.

3) More disclosure of information is needed e.g. training companies

While the chairman of NAAM did show me a breakdown of the expenditure of NAAM in 2014 and 2015, I was not given a copy of this expenditure. I am interested in the identities of the companies given the contracts to do agricultural training for the chili farms and to check their backgrounds. I have asked the chairman to publish this information on its website. I will wait to see if this is done or not. The identity of these companies is important in order to confirm that none of these contracts went to companies which are linked to MIC or to the chairman himself.

4) Possible conflict of interest via NAAM Trading House Sdn Bhd

NAAM set up a private company called NAAM Trading House Sdn Bhd which acts as the middleman between the chili farmers and the marketplace. NAAM Trading House Sdn Bhd is 49% owned by NAAM. A possible conflict of interest exists because NAAM Trading House may benefit from charging the chili farmers a transaction or commission fee from buying the chilies from the farmers and selling them to the marketplace.

The chairman explained that NAAM Trading House Sdn Bhd is no longer active because the farmers sell their produce directly to FAMA and the markets. We are not sure how much profit was made by NAAM Trading House given that its 2014 accounts did not provide information on its revenue and profits.

5) Suitability of government funds being allocated to an NGO headed by a Deputy Minister still questionable

Finally, despite the extent to which the chairman was willing to disclose information regarding NAAM’s activities, I stand by my earlier position that it is not suitable for an NGO where half of its board of trustees are comprised of members of a political party – MIC, in this case – to receive government funding for it to conduct activities and programs.

I will follow up with the chairman’s promise to provide me with a full list of details of all the 129 participants who have started their own chili farms. After getting this list, I will work with my colleagues and other interested parties to conduct a selected audit to evaluate the success of these chili farms.

Dr. Ong Kian Ming
Member of Parliament for Serdang