Owners' relatives are now the middleman supplier!

Solving the no-supplier problem

The word in the market is that many more suppliers have been avoiding doing business with Meda Inc Bhd and their associated companies, unless the terms are favourable such as cash on delivery or deposit + post-dated cheques upfront.

But Meda Inc Bhd's choices are getting less with each passing day. For some services, such as cooling tower repairs and maintenance, there are only those few big players. When these few suppliers hold back their services, shopping complexes and hotel operations can literally grind to a stop when the air-con system breaks down. Shoppers will run off, shops will refuse to pay their monthly maintenance charges and even sue Meda Inc Bhd for loss of revenue, and hotel guests will refuse to pay their bills even though the sauna is free.

You know what the Meda Inc Bhd owners are now doing to get around this no-supplier problem?

They're now getting their supplies through another company operated by their relatives!

Let's call this company Teoh Relative Sdn Bhd (TRSB). I will reveal the real name of this company in a later posting.

So, supposing Tak Mahu Lagi Sdn Bhd stopped supplying products to Meda Inc Bhd and Summit Hotel Subang USJ because of their infamous bad payment reputation, Teoh Relative Sdn Bhd steps in and source for those products, and then supplies these products to Meda Inc Bhd/Summit Hotel Subang USJ at inflated prices! Tak Mahu Lagi Sdn Bhd won't even know where the products end up, but most likely, they will be saddled with another bad debt from Teoh Relative Sdn Bhd.

My sources report that many of the products and services now being supplied to Meda Inc Bhd and/or Summit Hotel Subang USJ come solely from the owners' relative's company, whose actual business is nothing related to the products and services supplied.

Do Not follow standard procedure

What is even more interesting is that the normal standard procedure of open competitive bidding or tender is NOT being followed. This is against the legal requirements of procurement in a Bursa-listed company.

I can imagine the amount of profits this Teoh Relative Sdn Bhd will be making. I don't think the Teohs' relatives are the only ones benefiting from this profitable venture.

Isn't this a failure of directors' duties?


Isn't this an abuse of the owner-directors' position?

Isn't this an outright breach of trust?

Say "Welcome" to Meda Inc Bhd bosses & owners

Tension at Meda Inc Bhd corporate office

For the last one week, there's tension and excitement at Meda Inc Bhd corporate office.

Meda Inc Bhd group managing director Kenneth Teoh has been visiting this blog regularly. So is his brother Teoh Seng Aun. Even CEO OngBS, Datuk Hii (CEO of SEGi and managing director of EcoFirst) and Teoh's in-law VT have been checking out this blog, not to mention others from the group/hotel. I guess all of them would like to find out about the extent of their dirty laundry being aired in public. (But I will be fair, unlike some other people who hutang until mati).

The Teohs' relative, VT

Meda Inc Bhd insiders say Kenneth Teoh is hopping mad and on a "witch-hunt".

Kenneth Teoh should realise that all their dishonourable and unethical ways will come back to haunt him one day. While suppliers' options are limited by way of taking action against corporate bullies such as Meda Inc Bhd, there is now a new avenue of "citizen journalism". How long can Kenneth Teoh and his associates continue to hide behind their lawyers, draggy expensive law suits and nonsensical trumped-up allegations to avoid paying their suppliers? How long do they think they can continue to lie before they are found out? (I will write about this in another post).

My intention is not to defame anyone. Many of the corporate practices at Meda Inc Bhd may be found in other Bursa-listed companies, to a certain degree. But this one is among the worst of the worst. There are countless suppliers who became Meda Inc Bhd's victims. My company is one of them. It's my responsibility to my company because I ignored others' advice. I am also the victim because if they don't pay the bills, I cannot collect my commission to pay my father's hospital bills. Nevertheless, I try to be fair and even-handed in my comments.

I try to ensure my posts have factual basis. Since I demand credibility from Kenneth Teoh and Meda Inc Bhd, I have to do my best to uphold the credibility of my blog.

Who are those VIP gentlemen who have dropped in to view this blog in recent days?

For the curiosity of my readers, let me try to give a brief.

Teoh Seng Aun (TeohSA)
TeohSA is Kenneth Teoh's older second brother. According to sources, TeohSA is actually the driving force behind the Meda Inc Bhd group and associate PLCs - EcoFirst (formerly Kumpulan Emas), and SEGi. Previously they also owned very profitable engineering company Salcon Bhd, and furniture maker SYF Resources. Sources working close with the group say TeohSA is actually the one with the brains and business acumen. TeohSA has substantial shares in all of the brothers' companies in the group.

TeohSA is known to be very loyal to his subordinates. To the extent that he would even tolerate incompetence and even a bit of dirty fingers. Hence, in his power group, his people would serve him loyally for many years. Included in this group are CEO OngBS, and the in-law of the Teoh brothers VT. Let me say clearly that I'm not implying outright that these gentlemen are dirty-fingered or incompetent. However, I have to mention that VT, who was formerly running South City Plaza, was transferred to Summit Complex Subang USJ last year under a big group re-shuffling, but left shortly later under "awkward" circumstances. VT then went to work for Berjaya Group, but it lasted barely a few months. He was then brought back into the Meda Inc Bhd group by TeohSA. Blood is thicker than water. (VT is not the one holding up the payments, so I will avoid telling his tales).

Shouting match
During this time, there was a bitter political struggle among the brothers, especially between Kenneth Teoh and TeohSA who saw his power eroded with the loss of some of his strong kaki. It was so bad, in fact, that both brothers could be heard shouting and quarreling with each other in their corporate HQ at Menara Summit. Even the lowest ranking driver knows about this. This happened early this year.

One outstanding point that was told to me is that those working under TeohSA enjoyed much better salaries and perks than those working under Kenneth Teoh.

Datuk Patrick Teoh
Their eldest brother Datuk Patrick Teoh was an accountant who moved around with MCA people a lot. (I might decide to tell you all about a new "project" that they got from their connection with an MCA government minister). He has major shares in SEGi, EcoFirst Consolidated and Meda Inc Bhd. He was recently forced to step down from his chairman role in EcoFirst because of the huge losses the company suffered under his charge (at that time known as Kumpulan Emas Bhd). As deputy chairman with substantial shares in EcoFirst, people say he is still in control while the new chairman Tan Sri Dr Syed Jalaludin Syed Salim and new managing director Datuk Hii (CEO of SEGi) are just friendly parties acting as "front men" for the Teohs.

CEO OngBS
Chief Executive Officer OngBS is considered part of the TeohSA group, and has been there for many years. My insiders tell me that OngBS is "generally well-liked, respected but not assertive enough" in the face of corporate management issues with the Teoh brothers, but he is a rational, reasonable and a fair-minded man and a competent CEO. Such a CEO would be an asset to a messy and disreputable company such as Meda Inc Bhd because the owners would tend to be more rash and irrational in the way they do things as they are now guided more by their ego than any good business sense. For example, it's not good business sense to buy a BMW car for family use when cashflow is tight and their supportive suppliers are left unpaid, which caused a breakdown in Summit Hotel service to customers. Still, Kenneth Teoh did that.

BHTan
BHTan is director sales & marketing for the Meda Inc Bhd group, and probably involved in all the other companies in which the Teoh brothers are involved in. BHTan may also have dropped in to see this blog, though I cannot be 100% sure.

Kenneth Teoh has no loyalties
Contrast TeohSA with Kenneth Teoh, who holds group managing director position in Meda Inc Bhd and who controls the hotel business. the latter runs his show like a kedai mamak - everyone of his managers work according to Kenneth's Teoh's moods. He has no long-serving loyal executives or directors under him.

His most recent executive director RC lasted no more than 2 years. RC, I hear, was an aggressive, results-oriented and demanding executive. To his credit, Summit Hotel did improve in terms of service and quality during his time. He became Kenneth Teoh's right-hand man when he proved that he was able to dramatically raise Summit Hotel's revenue and profit margins and drastically reduce operating costs. Hotel staff enjoyed the highest service points payout ever in their history (2004/2005). Kenneth Teoh removed his previous executive director RChung and promoted RC to that position. Where RChung was respected by his hotel staff, RC was feared. RC was reckless as he went about executing his boss's orders and stepped on many toes. Furthermore, reducing hotel costs meant suppressing workers' salaries and this weakened the support structure in the hotel service.

Earlier this year, Kenneth Teoh initiated another messy purge and pitted different teams against each other amidst rumours and allegations. In the intense politicking, senior hotel and mid-management staff left in droves. RC then left the group recently.

In the Summit Hotel Subang USJ, Kenneth Teoh now manages it through the team comprising hotel financial controller MC and resident manager RS, where previously it was executive director RC and a general manager HTC. What a clever way to slash costs. Without meaning to cast any doubts here on those 2 gentlemen's capabilities, now it's like running an international restaurant with just the head waiter and accounts manager. I wonder if mama lembu can still deliver good milk now?

Coming soon: Semantan Suites

The same operating mode is also happening at Semantan Suites at Semantan Avenue, where they hired someone whose qualification and experience is considered by industry standards as not on par with the demands and requirements in managing such a property. It won't be this gentleman's fault if he fails. Semantan Suites may just become another run-down property after the company has made its money.

What next?

Now, it's up to Kenneth Teoh to decide how this blog goes. What he is going to do about the monies they owe to suppliers? If he pays us suppliers, I would probably lose interest in continuing with this blog. However, everybody knows his bad reputation in this matter is a life-long bad habit.

In the meantime, my friends and I are preparing a thousand emails a week to be sent out to draw top corporate leaders' and businesses' attention to this blog. I have to learn a few tricks from Jeff Ooi on how to achieve 300,000 blog hits a month. lol

The Bursa and SC will also be included. Our Deputy PM should be keen to read this blog, too, since he made that speech about good corporate governance. If he is instrumental in successfully prosecuting a Bursa-listed company, he will look good and gain credibility which will help him alot in stepping into the PM post in future. It shows us Bolehsians and foreign investors that he means business, that he walk the talk.

DPM says good governance is critical to Bolehland.

To read this news article, click on it.

Pay for a BMW or pay suppliers?

Another ex Summit Hotel staff talks...

We met up with JJ last Saturday. JJ previously worked at Summit Hotel Subang USJ.

It's also Eve's birthday, so she belanja us to a delicious dinner at Hakka Restaurant at Jalan Kia Peng (KL), and then we went over to Jazz Bar for some good music. JJ joined us a short while later from his workplace just nearby. Hotel staff, especially middle managers, work long hours but he is happy where he is now. He also brought along 2 colleagues. JJ is a really fun guy, and he's doing very well at this hotel now. He is loyal to his friends and he introduces business leads to them. His boss is sending him for a short stint overseas to get international exposure.

After a while, they were feeling a bit uncomfortable with the attention showered on them by some GUYS. Those guys were not interested in any 4 of us leng loi (pretty gals)! So we went over to Maison club, next to Sheraton Imperial. JJ knows the people at Maison; he knows a lot of people in the club scene.

We then had supper at Jln Alor.

JJ said it's such a beautiful change of atmosphere working at his new place compared to the previous hotel. The present hotel is an international chain where management is professional and Board of Directors do not interfere unnecesarily. Here, there are clearly defined roles and responsibilities for top and middle management. Targets and directions are set in a clear and transparent way that allow management team to plan and execute strategies that achieve those targets without intervention or interruption. While cost management is critical in any hotel, it is not done so at the expense of service standard and long term business.

It was a totally different scenario at his previous hotel, he said. There, top management constantly overload the middle managers with more and more responsibilities until they can no longer function properly. They also don't get extra pay. Due to physical exhaustion, they had difficulty meeting expectations, yet they shoulder all the blame. Worse, they could be putting a lot of time and effort on trying to achieve certain aims, but often top management and the owner (Kenneth Teoh) would step in and change course like a zigzag driver. Sometimes, he didn't even know what they (middle managers) were supposed to do anymore. Top management & owner were shifting goalposts all the time. Often, they change their minds midway. He blames it on the owner who himself is not a trained professional hotelier. The only real concern on the owner's mind is costs, without an educated understanding of the relationship between cost and service standard, ultimately affecting the business.

There's a limit as to how much you can save without hurting the service quality. If you invest below the basic minimum, the service is simply not marketable because no customer will be willing to pay for it. Furthermore, JJ had much difficulty delivering on the standard of hotel service and keeping his customers happy because the owner was not paying suppliers, and suppliers then refused to deliver supplies. If the owner cannot understand something as simple as that, then the owner deserves to lose money, JJ said. (In other words, the owner made things even more difficult for hotel managers to do their jobs.)

Ironically, the hotel was not losing money at all. In fact, it was making money for the unappreciative owner. The hotel did have a hardworking management and marketing team, JJ conceded. (Note: The hotel management and the entire sales & marketing dept have now resigned.)

However, top management would deal with the cost problem by slashing staff salaries, which pleased the owner Kenneth Teoh. However, it became impossible for JJ to hire new staff of suitable skill level to replace those who left. To make up the numbers, he often had to hire those with no skills or poor attitude. A lot of time then had to be spent on training new staff on the job, leaving him with little time to actually manage. The time spent training would then be wasted when the new staff quit one week later for a better paying job in another hotel. This led to further drop in hotel service standards. It was an endless vicious cycle.

Yet, he was constantly being blamed for problems created that were beyond his control. He was made to bear the brunt of sloppy service. Sometimes, he could not even meet customer's orders because the ingredients/products ran out due to non-payment of supplies. His own salary was 20% below market, and his salary was not raised despite all his hard work and using his personal resources such as asking friends to do favours, to get things done for the hotel. It was like asking the poor people to help the rich get richer. (Work responsibilities raised but no corresponding pay increase).

There was a total lack of system and proper procedures. It was a confusing mess. The owner himself (Kenneth Teoh) would sidestep the reporting hierarchy and put some middle manager/dept head in a very awkward position of going against his immediate superior. JJ recognised that this management style only breeds resentment, confusion and politicking in the workplace. The whole system breaks down, mana ada productivity? (In other words, the owner actively encouraged managers to play the "Survivor" game - see my post in http://summithotel.blogspot.com/)

JJ is glad he left Summit Hotel. It was a nightmare working there. He swore never to step into another hotel owned by a local "Chinaman" businessman, especially one like his previous hotel owner. There is a real reason why there are international hotel chains - professionalism. His former boss/owner think they could run a BMW business on a Wira budget.

JJ was visibly upset when remembering his time at Summit Hotel. The owner had no money to pay suppliers (causing supply interruption and creating unhappy customers) yet he bought a silver BMW-520 for his wife's personal use! In what way does the wife contribute to the hotel business, JJ asked?

Good question. Does this constitute abuse of company funds?

Readers should take note of this hotel before you apply for a job there - unless you are so desperate.

Note: At the moment, I can't verify whether the car was bought under the company or was it Kenneth Teoh's personal purchase. JJ says it was under Meda Inc Bhd. Either way, it's still a misallocation of resources. The owner should do the honourable thing of paying the suppliers first if he can afford to buy a BMW for his wife. The owner doesn't know his priorities. Our Deputy Prime Minister said something about good corporate governance the other day, right?

BMW520

COVA VILLA : Who wants to live next to a stinking sewage pond?

This is a repost of my essay in the other blog "COVA VILLA AT KOTA DAMANSARA" (Use the link on the right to go there).

Cova Villa - Can you believe this developer?

Think. If you yourself cannot tahan the fragrant smell of sewage in the air, do you think the students from SEGi college will want to rent your apartment to stay there?

COVA VILLA is built right next to an oxidation pond. It will become dirty, smelly and a breeding ground for mosquitoes and other horrible insects. Yuks. To maintain the value of your property, and to ensure you get tenants to stay there, the pond must be well maintained and kept clean. You have to pay through your nose for the maintenance, and the developer will have to be very good at maintaining the place. But will they? What's their track record like?

For your own good, please check on the background of the developer. Do they maintain and manage their properties well? Check up on Summit Shopping Complex at Subang USJ. Talk to the shop owners and tenants there. Check on South City Plaza at Seri Kembangan also. Other properties can be found on my "MEDA INC BHD" blog (the link is on the right).

The developer PHARMA EXEL SDN BHD and ANDAMAN GROUP SDN BHD both belong to the same owners of MEDA INC BHD. To find out more about them, go here --> http://what-you-dont-know-about-meda-inc.blogspot.com/ and http://meda-inc-bhd.blogspot.com/

Here are some quotes from the 12 December 2005 report in The Star titled "Assemblyman, council endorse builder's new proposal":

"Mokhtar said the place was in reality a secondary jungle with the lake being dirty as it was contaminated by the nearby IWK sewage treatment facility. The developer will be upgrading the drains around the area to prevent effluent from IWK to seep into the lake," he said.

Can you trust the developer? Have you checked their track record? Your condo investment will depend on whether the developer actually upgrades the drains to prevent effluent from IWK to seep into the lake. But what about the treament facility? The smell will be in the air every day and every hour. There are other similar properties with smelly ponds like this. They have all gone down in value.

You can click on the jpeg below to read the Star report.

The Star report