Anything that is growing unusually fast, for the type of thing that it is, needs to be checked out. And it needs to be checked out in a way that it hasn’t been checked out before.
– Dan Davies, author
Imagine me walking into a police station after losing RM2,000 to an online scam. Almost immediately, the advice would begin pouring in: “Why didn’t you verify the bank account?” “Why did you trust a stranger?” “Didn’t you check before transferring your money?”
There would be little sympathy because the assumption is that every individual has a responsibility to exercise due diligence.
Now imagine another case involving RM200 million belonging to a public retirement fund. This time, however, the explanation is strikingly different. We are simply told that the institution itself was deceived, as though those four words alone are sufficient to explain away one of the country’s biggest investment setbacks.
That is perhaps what troubles many Malaysians most. The very sentence so often used to remind ordinary people to be more careful has suddenly become the excuse that the people are expected to accept when the amount involved is almost RM200 million.
Prime Minister Datuk Seri Anwar Ibrahim recently informed Parliament that the Retirement Fund (Incorporated), or KWAP, suffered losses of RM200 million following its investment in Indonesian aquaculture start-up eFishery because of what he described as a “planned fraud”. He said the company had manipulated its financial statements, misleading investors.
No one disputes that sophisticated corporate fraud exists. But acknowledging that others were also deceived should never become a substitute for examining whether our own systems performed as they were designed to do.
Public confidence is restored not by saying, “Others lost money too,” but by demonstrating that every safeguard was exercised before public funds were committed.
Anwar explained that KWAP’s investment underwent its established governance process, including internal assessments, independent due diligence and reviews of eFishery’s financial position before approval was granted. That explanation, however, naturally gives rise to another question: if all these processes were indeed carried out, where exactly did they fail?
This is where the debate should move beyond emotion and focus squarely on governance. Due diligence is not meant to eliminate every investment risk, but it exists precisely to minimise avoidable risks by independently verifying claims by those seeking investment.
Hey! RM200 million is hardly a routine investment. It represents retirement savings accumulated through decades of public service by thousands of civil servants who have every right to expect their pension fund to exercise the highest standards of vigilance.
Every investment committee is expected to arrive at its own conclusions through rigorous scrutiny because that is precisely why boards, investment panels, risk committees and professional advisers exist.
The people, therefore, have every right to ask a simple question. If ordinary Malaysians are constantly reminded to verify before trusting, shouldn’t institutions entrusted with billions of ringgit be expected to verify far more thoroughly before investing public money?
The Malaysian Anti-Corruption Commission has begun investigations into the losses, and that is certainly the correct course of action. Such investigations should not be viewed as political exercises but as necessary efforts to determine whether governance weaknesses existed and recommend improvements where necessary.
PKR Pasir Gudang MP Hassan Abdul Karim has gone a step further by demanding accountability from the Finance Minister, who also serves as Prime Minister. Whether one agrees with his call for resignation or not, the broader principle he raises deserves attention because accountability remains one of the cornerstones of good governance.
Responsibility and authority have always travelled together. Those entrusted with overseeing public institutions cannot expect to enjoy authority without also accepting that difficult questions will inevitably arise whenever major governance failures occur under their watch.
We don’t seem to have learned from past lessons. The country has experienced painful financial scandals that should have strengthened governance standards and institutional vigilance.
Every major controversy is supposed to leave behind valuable lessons. If similar questions continue surfacing years later, we are entitled to ask whether those lessons were fully learned or merely acknowledged before business resumed as usual.
Several lawmakers have similarly sought clarification regarding accountability measures involving KWAP’s board, investment panel and senior management. Their questions should not be viewed as attempts to undermine confidence in public institutions but as legitimate parliamentary scrutiny over the management of public funds.
The FocusM portal posed a question that goes down well with many Malaysians. Before investing hundreds of millions of ringgit, there would surely have been financial analyses, risk assessments, legal opinions, committee deliberations, presentations and multiple layers of approval, so where exactly did the system break down?
This episode should therefore become an opportunity for meaningful institutional reform rather than merely another controversy that fades from public memory. Governance frameworks must evolve because fraud itself has become increasingly sophisticated.
That is precisely why institutional governance cannot remain static. Independent forensic accounting, deeper third-party verification, continuous monitoring after investments are made and stronger internal challenge mechanisms should become standard practice.
More importantly, transparency must remain the guiding principle throughout this process. We deserve to know not only how the investment was approved but also what reforms will now be introduced to reduce the likelihood of similar incidents recurring.
Trust, once shaken, cannot simply be restored through assurances or carefully worded statements. It is rebuilt through openness, accountability, corrective action and, where necessary, the willingness to acknowledge shortcomings and hold those responsible to account.
No one expects every investment undertaken by a pension fund to generate handsome returns. Markets fluctuate, businesses fail and investment risks are part of managing any diversified portfolio. But there is a fundamental difference between an investment that fails because market conditions change and one that allegedly collapses because financial statements were manipulated without being detected. The former is an investment risk; the latter inevitably raises questions about the effectiveness of governance and oversight.
This distinction matters because the public judges institutions not merely by the returns they earn but by the discipline they exercise before committing substantial sums of public money. Prudence is, after all, the first duty of every trustee.
Anwar has said KWAP and the investor consortium have initiated legal proceedings to recover the invested funds while strengthening internal governance. Those recovery efforts deserve support because every ringgit that can be recovered belongs, ultimately, to the retirement savings of civil servants.
Public institutions are not investing private fortunes or venture capital belonging to willing speculators; they are entrusted with funds accumulated through decades of public service by civil servants who have faithfully contributed throughout their working lives.
That is why expectations are necessarily higher. The larger the responsibility, the greater the duty of care.
Perhaps the greatest lesson from this episode has little to do with one Indonesian start-up or one investment decision. It is a reminder that governance should never be measured by the existence of procedures alone but by whether those procedures are sufficiently robust to withstand sophisticated attempts at deception.
At the end of the day, this is not merely about RM200 million; it is about public confidence in the institutions entrusted with protecting the retirement security of hundreds of thousands of civil servants and their families.
Confidence is built on the belief that every reasonable safeguard has been exhausted before a decision is made. When that confidence is shaken, institutions owe the public more than explanations; they owe them answers and the assurance that lessons have genuinely been learned.
Perhaps that is why one simple comparison continues to strike a chord. When ordinary Malaysians lose RM2,000 to scammers, they are immediately reminded that they should have checked, verified and thought twice before transferring their money.
Surely, when RM200 million of retirement savings is involved, Malaysians are equally entitled to ask the very same question; not of the victims of the alleged fraud, but of the system itself.
The views expressed here are those of the columnist and do not necessarily represent the views of Sarawak Tribune. The writer can be reached at rajlira@gmail.com
