Entire society mislead by a small group of people, says Khaw Boon Wan
By Li Xueying
18 February 2006
While acknowledging that the problems at NKF might have been discovered earlier if auditors were more alert and regulators more persistent, he added:
"When you have a chief executive officer who was determined to cover up his unusual conduct and who was supported by a captured board, it would take some time for outsiders to uncover his deeds."
He was responding to Non-Constituency MP Steve Chia who asked about "sharp comments" made by auditors KPMG about those who were regulating the NKF.
KPMG, which was brought in to look into the NKF's past, issued a report last December. It was critical of regulators - The Health Ministry, the National Council of Social Services (NCSS), and the Commissioner of CHarities - for failing to uncover questionable practicies under NKF's old management helmed by former chief executive T.T. Durai.
When the details came to light, Mr Khaw said at a press conference at the time that the government "accepts KPMG's sharp comments on the regulators".
Yesterday, Mr Chia asked Mr Khaw what he had meant by that.
"Does it entail the Government issuing a public apology to the people?" Mr Chia asked.
Mr Khaw replied:" Accepting responsibility means we acknowledge the problems as identified by KPMG. There were problems of various kinds at different levels, and let's extract lessons from there."
He added:"At the press conference that Mr Steve Chia referred to, I think I apologised."
Mr Khaw had said that the Government would "take part of the blame for allowing this to thing to drag on for longer than necessary."
Yesterday. he said the regulator accepted the criticisms but added that "it is easy to criticise such shortcomings on hindsight".
He then added:"Were the regulators responsible for the NKF problem? Remember that the NKF was, and still is, a non-government organisation, a private company. Was there gross or wilful negligence on the part of the government officers who regulated the former NKF? Did they fail to take reasonable efforts to look into the former NKF under the prevailing regulatory framework?"
The crux of the matter, he said, is that "a small group of people deliberately, through varios means, misled, in a way, the entire society, including Mr Steve Chia and myself."
Mr Khaw also went through the three areas in which KPMG commented on the regulators.
First, that they could have coordinated their duties better.
"This we would do," he said, highlighting a proposed revision that included a proposed revision that included the Commissioner of Charities and six administrators with defined roles to oversee charities.
KPMG also said the appointment of a Health Ministry representative to NKF's executive committee in 2000 had not uncovered problems.
But Mr Khaw explained this was not the representative's mission. Her role was to help influence clinical policies regarding haemodialysis. But she withdrew after she found the committee did not discuss such policy matters.
Third, KPMG felt that when the NCSS transferred supervision of NKF to the Health Ministry in 2002, NCSS officers did not throughly convey their concerns over the NKF's use of funds.
They did, said Mr Khaw. The NCSS wondered if NKF's fund-raising expenses were unduly high though these complied with the 30 percent expense ratio rule.
He said that after taking over, the Health Ministry regularly checked on the NKF's compliance with regulations , by relying on audits by Pricewaterhouse Coopers and KPMG.
Mr Khaw said regulators will tighten rules where appropriate. But they could not guarantee that no "unscrupulous" individual or groups would try to abuse the system. "However such abuses will eventually still be found out and the wrongdoers punished in accordance with the law."