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.
Looking to sell your car? Sell it with Carro.
Is this link 2 any loss in Proton revenue recently?
in conclusion,
Business should be run by BUSINESSMAN.
Government should be run by POLITICIAN.
the Malaysia problem was that, Politician is running Business.
more problem will come, example the earlier MAS, Perwaja, etc case, same problem, anything government touch in form of INVESTMENT will in the end….problem :(
and because of theses crocs..who suffer most..who have to bear all the consequences….
RAKYAT
we are the one who stuck in Proton car which is obiviously overpriced and have to open our doors everytime we need to pay tolls as the power window "rosak lagi".
those politicians/businessman cum politicians are driving super comfort continental cars with special pricing AP la…
they wont bother to share the economy cake right…but I still wondering why do malaysian still want to buy Proton…(people step on your head still want to pay them ka?)
The biggest problem we ave in Malaysia is the lack of transparency… no one knows what's going on until it is too late and too much waste has occured.
Some Mp only paying 40k 4 their super comfort continental cars if they received invitation offer from custom. But now no more after disclose in parliment.
Guys. Guys… u can have the detailed summary report on The Edge by PWC. It lists down almost all areas of Proton's operation from the decision making, awarding of vendors, shutdown policies, penalties, operational issues, production capacities, plant set-up, research allocation and spending etc. Looks like there's a big hole for Proton to cover it up. From the way of Proton operates , inefficiencies and losses due to plant shutdown or downtime due to lack of parts (vendor's fault) runs into millions as well as idling cost of workers. This doesnt auger well to the current situation where P1 market's size sank to a low around 30%. There are too many holes for P1 to cover now. Just too many…………………………….
I literally jumped out of my chair and deancd after reading this!
HI…PAUL mine might be little bit off topic. Anyways remember everyone was saying that the latest civic uses the hydroplane kind of viper…first kind in the world….i guess it must be wrong. I've seen a few Peugeot 407 with similar kind of viper which works exactly like the civic
Correct me if i'm wrong, i thought the 407 was launched first. Just my 2 cents thoughts !
ya read the whole ting on this week's Edge newspaper..pretty interesting …u get the idea that its a typical third world country company managment…hopefully the new managment is more trans[paprent…
Probably the real reasons for Kisai's resignation…
PROTON = HOPELESS…..
All GLC's are like licensed gangsters who are stealing and cheating our hard earned money just to satisfy their greed…
Compare to our 'kia su' neighbour, they GLC's are doing extremely well. Why??? Because they are managed by a group of well qualified professionals.. whereas our GLC's are managed by a group of kampung gangsters with their own interests..
not surprised!!.. imagine whats goin on for more than 20 years.. everything turned rotten oredi.. malas nak cakap lagi.. tutup pintu utk p1.. sigh.
Why is anyone surprised at this revelation?
I sort of expected it. If Proton management wasn't as forked up, then I would have been surprised. If Proton continue to do what is best for their political masters and their lackeys and their agendas, instead of what is best for the business, it will continue to rot. National pride my backside, national burden more like it. As are all GLCs.
I'd take what's in the PWC report as an overview of what's happened in the past under the previous management, certainly not an indicator as to where Proton is headed in the future.
From what I've been able to gather, the new residents of Mahoghany Row in Shah Alam genuinely want to change things and are trying to implement that change as rapidly as possible. But as someone who's been part of a couple of corporate turnarounds in the car industry, when done properly they take time and after the start the 'J" curve always looks pretty horrendous. Even Nissan's turnaround under Ghosn had a "J" curve that had a number of well-trained industry analysts flinching till things bottomed out.
Of course to the well-represented mob here that have already tried and convicted Proton, change is something they cannot embrace, let alone accept. This is probably especially difficult to deal with when it is an attempt fix a company that's been broken for much of the last twenty years and nobody realised it. For those folks a transparrent, functional and competitive Proton would eliminate their favourite punching bag, and after that life just wouldn't be the same, eh?
or perhaps just a lame excuse for the current CEO of proton's performance.
yeah, hoyea silverfish!!! heep, heep, horay…
*swordfish
The faster they shut down proton and remove all those protective barriers will cars prices be really affordable.
My dad, a school teacher back in the 70s and 80s, used to drive toyota corollas, the 74 and 80 models. Now, it takes a top earner to drive a corolla! All because of proton.
But then again, the govt won't let that happen, will they? Sigh…..
Matthew Seleigh, the failure of Nissan did not affect the prices of other cars in Japan. But Proton, being protected by the govt, affects the prices of other cars. So Proton does not have the option to fail!!! The people of Malaysia depended on them. Whoever gets special govt priviliges better be damn sure they don't squander away those priviliges!!! They came at the expense of the rakyat.
i support u avanza……it's time for the rakyat to buy something problemless. I know that Gen 2, Waja and Perdana v6 & also the new Neo would cost a lot to maintain.
Perdana V6 – really expensive maintanence, once about RM 100K+ and look at the resale value, even an accord 94 model has better value….or a corolla seg 1994.
Waja – use to own 1, but looking at that petrol tank……guzzler for a 1.6 even though it can give a reading of 550km+ on the highways…….why need pay RM 100 for a 1.6 when the Gen 2 is way lower with the same engine…….
parts are expensive and hard to get at potong kereta
Gen 2 – no glove box & coin box…, small at rear…..maintanence oklah…but i don't know why i like it…maybe because of it's small fuel tank about RM 65+ full tank. much better than waja
Wira & Iswara….the best product from them (proton)…..spare part senang dapat, maintanence murah & reliable……i know it's not the best but still very much better than all the models after them
Proton is producing 1 new car … what after every 2-3 yrs ? look at honda, toyota & nissan….people are not stupid guys…look on the road…. people are willing to fork out RM 85K+ for a Vios & City……to have less headache…although 1.5cc only….very good consumption as well !
Learn from them Proton…..!
agree with Avanza…after I informed my father that the Corolla price RM121K. he look sad after I told my Singaporean friend the price of Corolla he pay simpathy for all Malaysian..what have we done wrong to the G that we have to suffer for 22 years++? why do we forced to buy Proton? if there any other country who treat their "rakyat" the same.
Guys,
let it be…P1 already learn their mistake.
we as the malaysian are not suppose to blame them or G, rather than you guys keep blaming n complaining to them, better you guys come out with a resolution how to overcome the matters. I see that you guys talk too much but if you guys were GREAT!! better put or voice it in the paper!!
"dun ask wat your country can do for you, but ask wat you can do for your country"
P1 now should be more aggresive not only depend on G anymore. There's no time for politics, P1 should think likes other businessman. See how Petronas did and see the falls of MAS.
Never forget our history. See how the Jews did. They learn and study their history to make them better. Refers to the Holocaust whem the Nazi regime eliminate the Jews.
"the difference between impossible and the possible lies in man's determination"
Why dun we as Malaysian put all your ideas and comments in the paper (resolution draft) and send it to Parliament. As a democratic country we can do that so let ppl hear our voice.
No racerallyresearch. Proton did not have the option or luxury to fail. We all paid for Proton's blunder very dearly. Period!
It amazes me how some of you guys still think there's hope in this gov. 22 years on, you still believe gov have not heard our voices? The problem is they will not listen. Democratic my butt. Pandai2-lah at the election booth. I'm afraid soon we'll all have our views censored.
Ah well….I'll just keep it to myself. I wouldn't want to see Paul being shut down unnecessarily. For the governement officers and cronies in the GLCs whose been living in the expense of the rakyat, shame on you!
Be it MAS, TM or Proton, I just want to see them as a corporate and business entity. Not as riding tools for some parasites.
Who's to be blamed ? who's been buying all these cars for 20 yrs ? I remember the time when some even paid " extra " to get the car fast.
redragon: who’s been buying all these cars for 20 yrs ?
Not me.
can anybody confirm this; the previous ceo use pwc's report/work to justify the mv augusta purchase…..the same pwc?
(then, the new management use an investment banker to justify selling it to gevi wht the xxxx? …hahaha..)..now, come back using pwc hehehe..
anyway, i hope the the new management doing something, sue and send to jail the 'culprits', dont just use the report as cheap (if it involved pwc not cheap actually) publicity, action please, let be like korea more….
i sincerely hope the new management dont use this to hide their impotent to bring success to beloved proton
ya, i think some of u may 1 2 control & behave about your speech & opinion. I wouldn’t want to see Paul being shut down unnecessarily either. is better 2 express it over mamak store or kopitiam. people dont name our politic as kopitiam politic 4 no reason.
What should P1 do?
1) Don't enter the politic, be a unique business entity
2) Don't hold too much on the research, study more on the vehicles life-cycle
if the products gonna die, quickly replace the products
3) Sell all unsold stocks to third country – do smart partnership or appoint new lincenser that will rebadge PROTON cars e.g Wira, Saga – No Holding Stocks and Liquidity on Cash
4) Reconstruct the Pricing Strategy, based on Pricing Strategy Matrix where; there have ECONOMY PRICING, PENETRATION PRICING, SKIMMING PRICING & PREMIUM PRICING.
5) Do a lots of research with Petronas so that both parties can have Win-win situation e.g. Research in petrol consumption (RON) or lube
6) Educate people on the CAMPRO engine as many of them do not know the details about Campro than VVT-i
7) P1 should reduce the defects of their products. For example current Gen 2, the rims very hard so that will effect the fuel consumption. Should change the lighter rim.
8) Push more on marketing effort and business development
9) Use all their opportunities wisely e.g R3, merchandise shop etc.
10) P1 should think likes BUSINESSMAN
11) Terminate their vendors services if not meet International Standard.
12) Quality control is important
13) Place P1 concept showroom in top major shopping complexes so that i.e. KLCC or Midvalley so that tourist can have a look on our national cars. Plus with P1 merchandises i.e. Gen 2, Savvy & R3
well i have a lot more ideas to give so that P1 can consider about it.
will give later.
Thanks
haizzz , sad case .
Malaysians are really selfish sometimes. All they want is to drive supposedly 'better' cars when the Proton cars are no longer subsidised. Are some of you disillusioned?
Look at the bigger picture and think of the country you live in. We are right now supporting Proton as an industry, not just a business, in having something we can be proud of. Proton is not theirs, it's ours, and so, despite the embezzelment and whatnot, the majority of Proton and its backers are genuinely interested in building an industry that matches Japan and Korea, if not the rest of the world.
Of course, this takes time and we are going to go through many hurdles like mismanagement, etc. The point is to stick with Proton and make it work. What's the point of complaining and forever talking about removing protection so that you can drive cheaper cars? That's just immature, irresponsible and plainly stupid.
SatrtiGuy – "Of course, this takes time and we are going to go through many hurdles like mismanagement, etc. The point is to stick with Proton and make it work. "
I think there are much much more that they can do on the 22 years that they had. I'm not comparing with other countries or companies, but for the fact it has run for 22 years and still 'jiggling' with the same tune. So, do you still it's a good idea to support it? YES and NO.
Proton must continue it's work but as others said, please let it be run as a business entity and not as political show off.
Do you think if we changed the Proton MANAGEMENT and HIRACHY, that Proton will collapse? I don't think so. That are a lot of example out there where a company(s) will and had survived even you cut the 'head' off and replaced with a new one.
It's time for changes.
WIND OF CHANGE ANYBODY?
Avanza, I wholeheartedly agree with you in just about all you say.
Yup, when Le Cost Cutter stepped in at Nissan there was zilch impact on prices in Japan. I was up there buying a car and a house at the time, so I am way too familiar with the situation, as is my bank account. Then again, even an R34 GT-R is cheaper than the down payment on a scummy one-bedrom condo in one of Tokyo's trashier 'burbs.
To return to things local, the Government is way, way too aggressive as regards the taxation burden levied on Malaysians. Perhaps (and I use the "p" word because I am not convinced otherwise) there was a rationale behind raising the taxes to give Proton at head start when it opened the doors, but those days are long gone now. The previous management should have recognised that an weaned the company (and policies) off the National Udder and towards modern, responsible corporatisation, but didn't and has left that task to SZ and his team. Then again the previous management shouldn't have bought a habitually bankrupt Italian motorcycle maker, but I digress.
But the Government here in Malaysia (like Governments all over the world, even back in Japan) tends to get used to tax revenue, and the dosh that's been raked in from excise duty is considerable. Perhaps the G here in Malaysia is addicted to the money vacuumed in to the public coffers at the expense of car buyers much as the British Government was when their old car "purchase tax" was being levied. It took a helluva lot to get that one knocked down in Old Blightly and it was "only" around 30 percent, while the local excise duty is three times that. But I guess the Malaysian propensity to not (officially) complain means that we all grin and bear it, while blowing off steam here and laying all the blame on Proton.
To blame the new MD on the sins of the past is almost as moronic as it is irresponsible. And it's well and truly irresponsible. But hey, I'll accept the fact that it's easy to say someone's stuffing things up, particularly when the you haven't got the knowledge to formulate (or even suggest) anything to rectify the situation above and beyond a "shut it down". But expecting a guy like Syed Zainal to get the company turned around in only six months borders on the delusional. He'll need time and – more importantly – people on board who share his ideas of corporate responsibility and transparency.
Not being privy to what's going on deep inside Proton, I'll still wager that he's gone a lot farther towards getting proton fixed in his seven months at Proton than any of we blograts could in seven years.
After all, if we had the right answers we'd all have real jobs and wouldn't be wasting our time here posting online, would we?
One thing he'll have a tough time with are the local component suppliers. While some are worth dealing with, way too many are a lost cause. When asked by a couple of CEOs from major manufacturers about using Malaysia as a place to set up shop, I warn them that if they do they'll have to set up their own supplier network or import the bits from elsewhere. Sadly, these sub-par suppliers are the mob who have sold junk to Proton to line their own pockets with a few squillion Ringitt. But when the power window dies, the customer doesn't say "Damn cheapcrap supplier power window!", he or she says "Dam cheapcrap Proton power window". So the cozy relationship some suppliers seem to have at some levels of Proton are a major factor in the company's lack of credibility with customers. Coming from P2, I suspect that Proton's MD is acutely aware of this situation and I'll wager knows who the decent component suppliers in Malaysia are. After all the MyVi doesn't seem to be too awfully bad as regards components sourced outside.
Finally, the last paragraph in the post made at 16:07 by aksMs sums up what I (as well as a few dozen other industry analysts in the region) have been saying for yonks. Now that there's a new set of hands at the helm, they ought to be supported – or at least be given the chance to make the needed changes – not sniped at from afar. SZ understands that Proton cannot keep being the Proton it has been, and that the sole path to survival lies on a very different course than the company has been on for the last couple of decades. Maybe he ought to have as much of a chance to tackle that job as we do griping about Proton, if only because it's a tougher job by a few thousand orders of magnitude.
Let me see… the first Proton car in my family is a Saga Magma back in 1989. Due to numerous probs, we traded the car with a Mitsubishi Galant Super Saloon (cost RM 69k back then) in 1990. The car is still with me till now… 16 years old in 8 days. Not a single rust or damage to chassis (despite involved in 4 major accidents).
Conclusion? Proton cars are not meant to last more than 10 years (some claimed 5 years).
Sigh… after so many donkey years, now only Proton admitted they f**ked up due to poor management. Must be someone (possibly a VIP) hiding all the facts since Day 1. The contract termination of TM is a wise choice. They should sack another, also named TM for interupting the new Proton. For Proton to succeed, they have to be transparent. No more cheap advice from 3rd parties.
Proton Chairman is doing the right thing by engaging profesional auditor and revealing the truth, before it is too late (or already too late?). At least this kind of truth will not be exposed before our current Pak Lah.
Since Proton is a listed company, I wonder if our Securities Commission will also face action for its hefty negligence in guarding shareholders interest.
Those who still dream that Proton is the proud of nation is really childish. Proton is a disgrace to our nation (at the moment).
this n that all by them. police n tiff all play by them like a move, all choosing color skin n there mind only thinking how to suck easy money, think this is democratic n free country!?.
every good thing there 1 by taking off just like that without thinking how there come from .
MAS loosing money n how AIR ASIA making money. where is anti corruption, that never in there color skin, my B
SatriaGuy, the automotive industry is not just about Proton. If the govt had made the playing field leveled enough for the likes of Toyota and Honda to build their cars here instead of Thailand and Indonesia. We are supposed to be better than these two countries. Why did they shun us?
Think of the possibilities if they had come here instead. They will require all the local support they can get, which will spawn up many local quality (I repeat quality) suppliers while providing jobs for the masses. They will use our steel, our electronics, etc. We will probably be better off this way.
We will then be getting inexpensive, quality cars. Then perhaps with the technology gained from this partnerships, we can finally build our our cars.
But then building a car is not something simple. If you had noticed, only the very top brass countries build cars i.e. US, Japan. UK. France, Germany, Sweden, Italy. Korea just about made it. Countries like Australia, Czechs, Russia barely made it. And Malaysia wants to try?
I hate too burst your bubble, SatriaGuy, do we have the kind of people to do this? The engineers at Ford or Toyota have had such a long history technical heritage. Their grandhathers built planes and cars way back in the early 20th century. They have such pride that building good cars is second nature to them. What does Proton have? Quality is a joke.
The previous mgt made a huge mistake to commit 1 Billion of Proton's money on MV Agusta.
1. There is NO technology that can be transferred from a bike to cars. There has never been any car companies that bought car companies for its technology, or brand. Mahaleel quoted Honda, BMW, Suzuki- he obviously do not know the history of these companies.
2. M Justified the high price by saying that there was a R&D facility, inventory and a factory. R&D facilities are only as valuable as what they produce, otherwise it is only hardware. Has it produceed any special technology? The factory: has it any propritory technology or production process? otherwise it is just another expensive european factory. Inventory: any company with millions in inventory is in trouble and badly managed.
3. For 1 Billion, Proton could have spent RM250 million each to develop 4 models.
4. What did Mahaleel think they can bring to Agusta that thay can turn around, given that they were in financial trouble more than once. Shouldnt thay make sure that they perfected their products here before takling a totally new product.
I nwish the new CEO all the best. I heard he is an engineer who has worked all the way up, has a successful track record it Perodua, and is humble and spends time in the factory. What a change. Hope he will turn it around
stanleyshyeoh said,
July 31, 2006 @ 3:57 pm
It amazes me how some of you guys still think there’s hope in this gov. 22 years on, you still believe gov have not heard our voices? The problem is they will not listen. Democratic my butt. Pandai2-lah at the election booth. I’m afraid soon we’ll all have our views censored.
FULL STOP. you got that one right.
professional auditor is a bunch of bull. the situation is actually worse than it is. and being in the car industry at this time in history competition is many times tougher and proton has absolutely no chance of survival (in contrary to what many people in malaysia still beleive after all that has happened and is gonna happen). very soon this 'investigation' crap will blow over and nobody will remember it let alone know what the results of it are. proton will be 'alrite' again and release another savvy. legal action against past management most likely wouldnt take place at all.
Well said Mat Saleigh.
The problem is, this might have come a little to late and a little to halfheartedly.
Most M'sians have lost faith in Proton, so regardless how many new models, "quality" improvements, and management turnarounds, we will still be a bit wary. Once bitten, twice shy they say.
To took the last 10 years alone for Hyundai to get over the "quality" problem despite the fact some models of the last 2 generations were not only as good but also at times even better built than their Japanese peers. Even m'sians still have the notion that Hyundai is a cheap and unreliable car. Good grief….
Its an upward struggle no doubt, but in Proton's favour, it still has the government's support. However, if the consumers arn't swayed, its still bye bye for Proton.
A little help from Gov'ts is fine in the infancy stage. This is by god, already 22 years.
all gives good comments and make sense..but
PLEASE DONT BUY PROTON.
just dont buy all be like stanleysheoh
NEVER BUY A PROTON BUTB WONT LET OTHERS TO BUY
goodm, this attitude will lead Msian out of suffercation.22 years…is way way too long….come on stand up ourselves.
TAK NAK PROTON
I will buy another proton if the price reduce, quality increase and lower interest rate.
Wow…….. good comments there mathew and the rest !. The irony is tht it came to our noble senses , tht our G is practically sucking the juices out frm the system. With a unlogical,senseless,provacative,idiotic,meaningless and crucially blood sucking machine so called the NAP and yet with many of our brainless or harebrained MPs in the parliament… none , may i say NOT a single soul dare to stir up the hornet nest… Y Y Y ???? May i ask ???. Y is that a soon becoming white elephant proton were let to be soooooooo damn corrupted for 22 bloody years ?. Y Y Y ? Y werent any controvesy raised up earlier ?.Thats 22 years .. man. Gosh………….. Good grief .. Not to mention bloody MAS………. TM ………… the list is endless.
Thumbs up to proton (for once) for commissioning PWC to do the audit in the first place.
This finding in particular is very worrisome:
"Meeting minutes do not indicate of Proton’s key management committee was formed by board’s mandate."
What exactly does this "key management committee" manage? It's no wonder there's such a huge leakage of funds from Proton if the management was never even appointed by the board in the first place!!!
At least, now that all the skeletons have been brought out of the closet, someone can actually do something. I hope.
Fingers x'ed.
They are telling people about problems happened in the last management team, that's good actually… that's the sign that they are moving forward, rite?… I dont know if having no plan in executing any legal action to those culprits would be good… Proton have had the chance to change, and it is still not too late to retain it's existence…
Mismanagement?
Close one eye lah.
After a while the hype will die down and everybody escapes unscathed.