Tuesday, June 21, 2011

Realities of finance

Just like the famous joke on 'who is the boss?' in relation to our body, I am sure many people will ask the same question about a company.

I am reminded of an English friend who qualified as a chartered accountant and joined a company for the first time. She was asked by her colleagues in the professional firm whether she was given a company car and she replied, 'No. The boss thinks the salesmen need cars more than a financial controller.' Given limited resources of the company, the decision was clear. Without sales, there won't be a company, sooner or later.

Who is the boss?

Nur Jazlan, as UDA Holdings Bhd chairman, should be commended for speaking out on the financial realities of the company. As usual, for being frank, he was unfairly criticized by some in Perkasa and Umno.

Nur Jazlan: Time to rethink bumi agenda

Excerpt:

He said the cost of the bumiputera agenda is not sustainable in the long run and the government must realise this, adding that the government must find a new formula to define the agenda in the current situation.

He added that in its golden years, UDA was given an annual grant running into multi millions of ringgit and its main purpose was to develop and build. It was not profit-driven. The completed projects were then given to bumiputeras. However, those assets soon became rundown as there was no maintenance.

He said UDA is set to lose RM1 million a year from the newly refurbished Puduraya Terminal.

“UDA spent RM63 million [to renovate and refurbish] but will never recover [the cost]. We want to raise the rents or service charge just to cover the cost, but even then the tenants are shouting because they want to continue paying the old price. Without the rise in service charge, we are expected to lose RM1 million a year,” said Nur Jazlan.

“If the cost is going to be detrimental to the company, then you better think again about the bumiputera policy in its current state. Nobody wants to tell the truth, but the truth must be told now because the reckoning is near.

“I have to make sure UDA survives first. The first priority of UDA’s bumiputera agenda will be profit, then only can we think about what we can afford,” said the feisty politician.
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