18 September, 2011
The Management Committee
The Sarawak Club
Dear Members of the Management Committee,
Re Members’ Circular of 8 September, 2011
We write as the Immediate Past Management Committee (IPMC) and this represents the views of all IPMC members who had officially consented to points included herein.
1. You said: “Due to the Resort’s monthly operating deficit, the Club was losing about RM110,000 each month..”
We say:
The Golf Course was only opened at end of 2008. Like all businesses it needed time to establish itself. The trend was improving then and patronage rising. Cost would have eventually trimmed
as the course matures and usage promoted to enhance revenue. Your committee should have given it sufficient time and also promoted its usage.
2. You said: The Club had a few hundred thousand dollars…”
We say:
We started the project with a detailed cash flow. The project was duly approved by over 51% of all members through the return of a form distributed to all members. This was officially
reported at the EGM on 20 June 2005 and it is in the minutes that the internal auditor and an independent audit committee verified and certified the count. So, at that material time, the
budgeted contribution from the over 51% amounted to RM10.3 million.
A group of members campaigned to dissuade members from paying for the golf resort claiming they have an “innate right” to choose even though the project was approved and ongoing. There
was already contractual commitment and no turning back. Due to the persuasion of this group some 680 members opted out or withdrew. As a result we were RM2.45m short. We had then
pre-empted this shortfall and proactively informed members in a circular on 19 March 2008. We then had to reschedule payments to some suppliers and due to our good will with them they
willingly obliged.
The fire that occurred in 2006 also drained the club of RM2,000,000 in additional cost of construction to upgrade our club. This was duly approved by the EGM before being spent.
With prudent financial management, we would have paid suppliers according to reschedule had we opted to stay back. We never had to go back to members for more money. Why did you not
have a dialogue then with our team to see what our plans were and refrain from assigning blames? This consultation with the IPMC should have been done if there is genuine goodwill and
sincerity from your part.
It was because by persuading members to withdraw from paying you created the funding problem. It was due to this that the whole Management Committee then decided to retire at
the 2009 AGM. Our reason was to let you come in to sort out the problems you created. When we disclosed this intention to Richard Wee and Chew Pok Oi at a meeting prior to nomination,
the remark from Pok Oi was: “I thought we were pushing a point. We did not expect you to step down. In that case I nominate Richard.”
To this we replied: “Be our guest.”
3. You said; “….Before MC left office, they authorized a payment of RM300,000 to contractor for the golf Resort.”
We say:
The consultants and our duly appointed Golf Development Sub-Committee certified that the contractor had completed the work. Albeit there were some defects and a defect list was
prepared for the contractor to remedy. Contractually we had to pay. The contractor hadthreatened to sue the Club. Our decision then was to pay the contractor part of the balance so
as to avoid the Club from being dragged into protracted and costly litigations.
You had taken the advice from your legal advisors to withhold payment. As a result The Club isnow being sued. The legal cost budgeted is RM250,000 as requested by you. The claim by the
contractor is now not RM1.9million but RM2.3million inclusive of interest. Is this the best course of action to take? What is the likelihood that whoever wins, the loser would appeal? This means
more cost to members. You could have taken a business wise decision and negotiated. Why didn’t you try harder or at least gotten our help?
4. You said: ”….a letter promising to pay a further RM60,000 per month until August 2010”
We say:
This money was for the golf course development which was budgeted collection from 600 remaining golf course members who were still paying the RM100 per month till October 2010.
This money was for the construction cost. As this was assured collection we were able to assure the contractor of the monthly payment to him and avoid legal action by him. We had to assure
him that he will be paid to avoid the costly legal case.
Had your committee used the money as intended you would have saved the legal cost and perhaps negotiate for an amicable settlement of less than what was asked for. We knew the
details. We could have helped. You did not request our help despite our many offers to help.
5. You said: “pay the contractor a further sum of RM296,880 from the Club money expected to receive from the insurer in respect of the fire…”
We say:
Based on our estimate RM296,880 was expected to finished off the contract payment and avoid litigation.
It must now be put on record that after the fire, the contract payments for the rebuilding of the city club was met by cash collected then from members contributing toward the building of the
golf resort. Does the present MC know that without the golf resort fund being used first to pay the city club house reconstruction contractor, work could never proceeded on time? We will not
have a brand new and much better city club completed in 6 months. Members would have lost interest if facilities and services were not put back so quickly.
Non golf resort members never wanted to accept this fact and to appreciate that golfing members did not complain of their funds being temporarily used for the reconstruction of the
city club. In fact it was disclosed many a times in the general meetings.
6. You said: ‘……we engaged the contractor in negotiation for settlement…”
We say:
This should have been pursued. Why did it fail? The members must know why. Was there genuine effort? The IPMC should have been asked to help. Even though it offered, this offer was
never accepted. It could have saved us time, lots of members’ money and saved our very important reputation of not being sued.
7. You said: “ ……A court case is now pending……”
We say:
We will not comment as the case is pending before the court and is sub-judice
8. You said: “….Club has RM3million…..”
We say:
“You have done well. Congratulations!” You managed to get members to accept the first subscription increase in ten years!
Our point is that on your own admission, you had reduced the creditors from 6 months to 2 months. In spite of that, you managed to accumulate RM3million during that time. An average
of RM200,000 per month over 15 months. Now that creditors accounts have been updated our cash reserves is going to increase at an even more phenomenal rate. We will not speculate how
much but it will not be small. Has the increase in charges to members been too drastic? Are you over charging members? Are you making money out of our members?
Please also admit that members as a matter of course also owe the club at any one time for current and overdue subscriptions, signed chits, etc. to the tune of RM0.75million to
RM1million. Why did you not disclose this? As a matter of practice this money when collected the following month is to pay for creditors which you referred to above.
9. You said: ‘…..RM2.3million has to be set aside as contingency……”
We say:
In your paragraph 9 you claimed to have a good case. Why then is this provided in full? Is there doubt?
Members must now know that instead of working towards a settlement with the contractor for RM1.9million, we now have a provision of RM2.3million plus legal cost of RM250,000 and
perhaps other costs including appeal cost even if we win the case. Is this a prudent decision and the good advice from some quarter?
10. You said: “The Club need reserves for repairs…….”
We say:
This is always taken care of on a routine basis and operating in nature. The funds from members’ subscription should be used for this. In good business practices we do not put large
reserves like this for such contingencies which are required in the normal course of business.
11. You said: “……had reserves in excess of RM6million………..”
We say:
This money was collection for the golf course project. Collection started in 2005 after the project was approved in 2004. That is why we pointed out earlier that part of this money was available
to pay the city club house reconstruction contractor progress payments before the insurance money came in.
Do we still need to talk about “you and us”? It had been “one club” all the while.
Let members now note that golf course fund collection was partially used for the city club reconstruction as a bridging loan before insurance money came in. This was never appreciated
and you now want to “cut” that golf resort club off!
In your last paragraph of Page 3 you said “Today, the operational loss at the Resort has been trimmed to less than RM50,000 per month. …”
We understand that the golf course maintenance contract with SJGFA Sdn. Bhd has been terminated. In the then contract SJGFA was responsible for:
• Supervising the course and its maintenance
• Golf course machinery fleet
• Fertilizers & Soil Amendments for greens, tee-boxes, fairways & rough
• Chemical requirements-herbicides, insecticides, fungicides, others
• Repair & maintenance of equipment + workshop
• Fuels & lubricants
• Sand & gravel for greens
• Drainage & irrigation-service & parts
Kindly enlighten us. You have now employed a Golf course superintendent. How much is his salary and where in the accounts do you park his cost? The club has taken over all of SJGFA golf course machinery fleet. Was the take over at fair value? Was any independent party consulted before this was valued?
How much is the club now incurring monthly paying for the machineries and where in the accounts have you parked this cost? Where in the accounts do you now park the costs of fertilizers, chemicals, fuels & lubricants, sand & gravel, drainage & irrigation-service & parts. If you total up all the foregoing mentioned costs do you still trim the operational loss to RM50,000 per month? We would like you to show to members on a basis of apple to apple comparison and we look forward to full disclosure to the foregoing.
On another issue, why was the excavator that you bought recently for the golf course financed by a
finance company? Was it fair on members when you have reputedly RM3.2million cash in bank? What kind of business is this? It does not appear that you are looking after the interest of all members.
We hope this has put on record our side of the story. This is a family club with a history that is
unparalleled. We fully agree we should not write blogs and wash our linen in public. This route was
deployed by “Save the Club” lobby two or three years ago. It is for this reason that we are writing a
private letter to you to avoid aggravating the issues. Facts are facts and no amount of writing, debates and talking will change them.
As for members, we leave it to you to disseminate this information to them. Now that you have
circulated them your views we hope you will be magnanimous and gracious enough to also let our side of the story be known. We hope you will distribute this letter of ours to members too and promptly. We hope that it will be circulated in print and also posted in the Club’s official Web Site as you have done with yours. The members should be entitled to hear both sides and judge for themselves.
With this letter we hope to lay to rest all these differences that has been created in the club and we
hope this historical club will have “….PEACE WITHIN THY WALLS” as the Rajah Muda Bertram Brooke wished for when he declared this club open on this present site in 1927.
As a parting note we feel that what needs to be explained is done herein and that the “dialogue”
proposed for 2 October, 2011 by you is no longer necessary. It will be divisive. We like the issues to be laid to rest and let members judge by themselves after reading both sides of the story. No further exchanges are warranted. We hope we can be a family and social club, as it was intended to be, again.
Best Wishes to you and members of The Sarawak Club,
Yours truly,
Tan Sri Datuk Amar Haji Adbul Aziz Bin Dato’ Hussain
Past President & Members of the Management Committee
The Sarawak Club
2001-2009
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