Dear Haniza Abdul Hamid,

IR Contact: HRCPD-Corporate-Affairs@hrc.com.my

 

My many thanks to you for the many responses you had given to me on my previous emails on financial ended 31th September 2022 questions, 64^th AGM questions and my whistle blowing questions.

 

You had done a great job as IR contact and you have my respect for your professionalism conduct but I cannot say so on HRC Top Management/BOD conduct with their (with/without prejudice) opinion that my intention is to damage the reputation and integrity of the Company and its Management and this could impede the Company and its Management from carrying out their business in a smooth manner, which could in turn affect the company’s valuation.

 

I repost my intention here and my conscience is clear:

I as a member of the public and HRC minority shareholder would like to raise my genuine concerns , which I believe shows malpractice, impropriety, misconduct or omission at the very high level of decision makers which have cause loss to HRC, and detrimental to the  interests of company, employees, minority shareholders and Malaysia tax collection

 

Please allow me to restate my case in point and my genuine concerns

From FY2022 quarterly report:

Fair value gain/ (loss) on derivative financial instruments

Quarter 1: RM (432,206,000)

Quarter 2: RM (438,758,000)

Quarter 3: RM (364,570,000)

Quarter 4: RM (461,939,000)

FY2022: RM (1,697,473,000)

HRC quarterly financial performance:

Quarter 1: Profit/(Loss) before taxation RM 85,278,000

Quarter 2: Profit/(Loss) before taxation RM 897,257,000

Quarter 3: Profit/(Loss) before taxation RM (894,141,000)

Quarter 4: Profit/(Loss) before taxation RM (482,776,000)

 

Pages: 32 and 33 (2022 AR)

However, turnover rates rose to 15.90% or 52 employees in FY2022 from 11.80% (40 employees) in FY2021 due to burgeoning employment opportunities as the economy continued to rebound, as well as heightened demand for skilled workers within the oil and gas industry. Due to HRC’s reputed strong training and development culture, there have been concerted efforts by industry peers to target-hire our skilled certified workers.

Response from HRC:

During the year, the attrition rate was 14.37% which were mostly recorded from the support departments. We are unable to disclose any detailed breakdown of the employees by their departments as the information contained therein would be commercially sensitive

 

External news: Hyundai Oilbank offers 1,000% bonuses on upbeat earnings

By Byun Hye-jin

Published: Jan 2, 2023 - 15:33       Updated : Jan 3, 2023 - 20:12

https://www.koreaherald.com/view.php?ud=20230102000599

{Hyundai Oilbank, one of South Korea’s leading refiners, said Monday that it handed out 1,000 percent of base salaries as bonuses to its staffers.

 

The company declined to disclose the specific amount of the salaries given. In 2021, its employees received an average of 121 million won ($94,800) per person including bonuses at a 600 percent rate.

 

The refiner’s lump-sum bonuses came in line with the refining industry’ stellar performance last year. In the third quarter alone, Hyundai Oilbank’s operating profit skyrocketed by 226 percent on-year to 2.8 trillion won. Adding the fourth quarter results, last year’s cumulative profit will increase even more, sources said}

 

Any responsible, fair-minded and right-minded BOD will be very alarmed and concerned with HRC’ 2022 financial report (Continues 4 quarters derivative financial instruments loss with cumulative loss: RM 1,697,473,000. Operation loss in quarter 3 and quarter 4 whereas regional refinery: In the third quarter alone, Hyundai Oilbank’s operating profit skyrocketed by 226 percent on-year to 2.8 trillion won. Adding the fourth quarter results, last year’s cumulative profit will increase even more, sources said) and turnover rates rose to 15.90% or 52 employees in FY2022 from 11.80% (40 employees) in FY2021

 

Shouldn’t BOD leave no stone unturned to find out what has gone wrong and what needs to be done to improve the SOP and prevent the reoccurrences instead of defending the indefensible on technicality as below?

 

“The audited financial statements reflect a true and fair view and there is no omission, misconduct, malpractice and/or impropriety detected.

We would like to reiterate that our decision-making process is guided by a strict code of ethics and compliance with our company’s policies and procedures, which include a thorough evaluation process to ensure that we obtain the best value for our purchases while maintaining high standards of quality and reliability to our customers. We remain committed to always operate with integrity and with the best interests of our shareholders and stakeholders.

Both, the Whistleblowing Committee as well as the Company’s external auditors i.e., PwC have reviewed the existing hedging policy, internal controls and activities. There is no malpractice, impropriety, misconduct, and/or omission detected.”

 

With all fairness and without prejudice if Top Management and BOD do not see anything wrong on the above and the need of post mortem to improve on company’s policies and procedures then to my opinion their action is the one that will impede the Company and its Management from carrying out their business in a smooth manner that should turn around the business into profitability, which could in turn benefit the company, its employees and the company’s valuation thus benefit the shareholders at large.

 

Lastly, may I know when will HRC publish the 64^th AGM minutes of meeting/Key matters discussed in HRC’s corporate website?

 

Thank you

 

 

Dear Mr. Surinderdeep Singh Mohindar Singh (Independent non executive director/The Chair Board Whistleblowing Committee),

 

Without prejudice, I afraid I would not be getting any reply from you since the Top Management already overstep your authorities as Independent non executive director/The Chair Board Whistleblowing Committee and reply on your behalf (with/without your consent) that all whistle-blower complaints (I assume included my whittle-blowing complaints) have been thoroughly investigated without evidence (included two invoices send to me by anonymity sender) of any malpractices and mismanagement. The year-end accounts have also been audited by our external auditors. As such, we have nothing more to add.

 

Here I can only repost what I say before about the best Independent Non-Executive Directors who are reflective and thoughtful in their approach, ask the tough questions and offer considered advice based on sound judgment.

 

Successful Independent Non-Executive Directors must maintain integrity and have strong principles. They insist that the right thing is done for the company.

 

Thank you

 

 

Dear SC and Bursa,

 

I refer to below link:

https://www.sc.com.my/api/documentms/download.ashx?id=b59a0f5d-c414-4c27-b1c2-37ad15072d47

 

Annual General Meeting CORPORATE GOVERNANCE CHECKLIST FOR SHAREHOLDERS

Co-author by SC, Institutional Investors Council Malaysia and MSWG

 

As a minority shareholder I had played my role and held up my end of the bargain in holding BOD/Management responsible, accountable and answerable at AGM Q&A as espoused by the above link.

 

I am asking now, the SC/Bursa as market regulator and investigator please exercise your regulator and investigation power entrusted to SC/Bursa to call up the related party to investigate without prejudice HRC’ BOD have failed to carry out their fiduciary duty and in breach of Companies Act 2016: Section 213: (1) A director of a company shall at all times exercise his powers in accordance with this Act, for a proper purpose and in good faith in the best interest of the company.

 

 

Thank you

Have a good day

 

Best Regards

Lee Soon Sheng