Dear all

Someone drop me this message at https://messenger.i3investor.com/m.

I encourage more people with inside information of malpractice, impropriety, misconduct or omission at the very top level that cause loss to HRC to drop me more email. I will compile this information and write to SC/Bursa again after CNY. My email: sslee2309@gmail.com

I came across your postings in the klse.i3investor.com forum and decided that the internal doings of HRC is worth the exposure. I am sending this email to you in anonymity because of obvious reasons. HRC whistle-blower policy is a joke. How do you keep protect the whistle-blower when the whole thing is ‘guarded’ by the CFO and he’s one of the parties that employees have problem with.

The hedging measures that caused so much loss in 2022 can be attributed to the accountable parties in accordance with the HRC Manual of Authorities: It is unfathomable that such loss-making decision were made repeatedly without making a drastic change to the company direction. Even of the plant stops operation at all, the losses will not be this big.

There are a few instances since HRC was bought over, where integrity is questioned and cases pertaining to flowing out of the companies coffers to overseas with the guise of Related Parties Transactions which were approved by board of directors. There are no issues if the services provided via Related Parties Transactions are justified and valuable, but more often than not, it is just a vehicle to syphon out money to the 3rd party.

One such instance is the Invoices issued by Hengyuan International Sdn Bhd (HISB) to HRC (Invoices INV-20080 & INV-20081 dated 26/6/2020) with regards to SBM & PLEM projects occurred in Q2 2020. INV-20080 was issued to the amount of RM 1,000,000.00. It was justified with 1104 total manhours. Meanwhile INV-20081 was issued to the amount of over RM 1.6 million which charged from claimed 1800 manhours. The invoices were issued with just 1 page justification with no breakdowns of the costs and NO REPORTS were submitted or reviewed. The invoices were reviewed and commented by the Technical Team to be too excessive but with no impact.

For a more recent example, the newly completed E4M projects are currently in operation even without the issuance of CCC from local authorities. It was declared to be completed and ready to be commissioned even before BOMBA certificate was issued to HRC. If people are to look deeper into E4M project, a lot more questionable practices occurred including the takeover of the project from the original EPC contractor to HQC which happened without proper due diligence. Also recently is the payment request by HISB to HRC which involves multimillion ringgit as payment for the so-called experts dispatched from Hengyuan Headquarters to “assist” in the project commissioning. In reality the “experts” are just young engineers sent without clear objectives and far away from assisting the commissioning of the project. Refer to HYSH press release http://es.hyshjt.com/show-14-103-1.html. The best part was that for each person, HYSH/HISB charged HRC more than 200 USD per hour for the whole duration they are at site.

There are many more instances of questionable practices which are not in-line with internal procedures that may have directly or indirectly impacted HRC operations and employees. One thing for sure, this is a zero-sum gain where HRC is the loser, and another party brings home the prize.