Professional services firm PricewaterhouseCoopers was commissioned to do an audit report on Proton in September last year by Proton chairman Datuk Mohamed Azlan Hashim, and it’s report revealed poor corporate governance by the previous management of Proton. Key points include:
- Lotus purchase deal was signed on October 16 1996, but only presented to Proton board a month later on the 27th November.
- Not clear if budget for Tanjung Malim plant was presented to board, but preliminary estimates were informed.
- Material legal cases like a claim by Proton Automobile Deutschland for RM162 million not presented to board.
- Management misrepresented potential of MV Agusta to the board, saying it would generate positive revenue from 2004 onwards. Reality was far from figure; Agusta needed RM90 million financing in 2004.
- Meeting minutes do not indicate of Proton’s key management committee was formed by board’s mandate.
- Projects were implemented without proper consultation, in-depth discussino or awareness of legal problems. Expenditure for these projects run in the billions.
Current Proton managing director Syed Zainal, who came in long after this audit was commissioned said they are looking into details and are not ruling legal action against the previous management.
UPDATE: Proton Holdings Bhd managing director Syed Zainal Abidin Syed Mohamed Tahir says Proton is taking a proactive approach to align corporate governance to best practices with a review of all major processes, decision-making and boundaries of authority.