SGM money matters: An interview with the accountant

‘If you don’t want to do gokuyo (monetary contribution), that’s fine. You do not want good fortune is it? But I will certainly not miss any opportunity to accumulate good fortune.’

Over the years, the concept of ‘good fortune’ has been drilled into the brains of many members. Members contribute without ever asking or doubting what SGM would do to the amount. The focus is on transforming one’s karma. While there is no question about the benefits or good fortune of sincere offering, what we are asking for are transparency, accountability and governance in preventing corrupt practices and abuse of these sincere monetary offering.

Without strictly upholding the principles of good governance, layout by the General Director in April 1, 2016, which are transparency, accountability, responsibility and fairness, how can we ensure that every cent is accounted for and used for the intended purposes? That no money is being misuse or siphon off to individual pocket?

In July 2017 issue of Cosmic, page 59, SGM published some information regarding the organisation’s income and expenditure in 2016, illustrated with two colourful pie chart. The information given was only in percentages, the actual amounts shown are our estimation.

income expense

QuietRevo got hold of a professional accountant and ask his views.

Question 1 – What is your take on the report? Is it good?

Not much use. Look like SGM wanted to give the appearance that they are practicing transparency, and yet they do not share any significant information. A superficial façade, if you ask me. It’s all in percentages and no actual figure was provided. To put it bluntly, it is a report fit for a six-year-old. SGM treat its members as immature kids, unable to think for themselves and cannot be trusted with proper information.

It’s bewildering to know that an organisation with billions of ringgit in assets can get away with reports like this. A joke if you ask me. Anyway, I guess there will be many leaders who are happy and now can tell everyone that SGM is practising transparency. And we can all feel reassured that everything is fine.

Question 2 – What other information would you like to see in this report?

It’s a report on the organisation’s AGM. At the very least, let us know who are in the General Council, who attended and who didn’t, who was voted in and who was replaced. These are the highest decision-making committee and it is important that SGM give the membership the confidence that these individuals are trustworthy, do not have any conflicting interest and come with a clean background. Provide the official minutes of the meeting. I assure you it is not a complicated or lengthy document. Then, we can talk about the details.

Second, the income statement (records of all the income and expenditure) and the balance sheet as at 31 December 2016, comparing the figures with 2015 and 2014. With these, we can scrutinise the major changes in assets, expenditure and others. Now, this report here does not even provide figures, merely percentages.

Question 3 – But wouldn’t that invite all sorts of unnecessary attention and provide opportunities for the enemies of SGM to attack and undermine the members’ trust?

That is not a reason not to tell all. In fact, that is the very reason to tell all. For a large, and very rich, organisation like SGM, the level of education and professionals among its membership and the light speed of social media spreading news, both good and bad, SGM must be as transparent as possible. Their accounts must be able to withstand all kinds of scrutiny, even the most trivial.

The biggest threat, of mishandling of funds, comes from within the organisation, not outside. It is those in office or in the General Council that we keep a strict eye on.

I heard from a SGM leader, also a CEO of a public listed company, that in Australia’s Soka Gakkai, all members can attend the AGM and field questions even if he contributed just one dollar. It is time-consuming and sometimes embarrassing. But this is the best check and controls that the stakeholders, contributors in this case, can have to prevent the organisation from being hijacked by a few individuals. In Malaysia, dozens of additional YMDs from neighbouring state were call in during the AGM to add another level of security in the last two years. It is like our members hired the security guards, but now we, the true owners, are being locked out.

And more importantly, to protect itself against all unnecessary and sensational allegations like those you are reading on the internet regarding Soka Gakkai’s organisations in Japan, Taiwan, Singapore and Hong Kong. No laughing matters. It hurts the organisation’s reputation.

Question 4 – But we are a faith organisation, I was told. We are here to practice the Daishonin’s Buddhism and pursue absolute happiness. We are also here to mutually encourage and support one another. But we are not here to audit the accounts and look for worms. So, is this corporate style governance and auditing necessary? After all, I don’t understand much of it and I feel it is better to just leave it to the top leaders. I can trust them.

You can trust them all you want. If you think this is not important, then, so be it. But remember, it is important to some people. They want to ensure that the organisation do not become another newspaper headline like City Harvest. They have every right to ask for good governance. If you ask me, they should continue asking these questions and demanding answers. This is the only way to keep the organisation clean.

Also, we are talking about a membership of 40,000 members. If members do not keep a strict eye and demand strict governance, SGM will be subject to allegations after allegations, embroiled in crisis after crisis, that they cannot answer nor stop. It’s like driving a Porsche without brakes, airbags and seat belts.

Question 5 – We are a faith organisation. Our people, our top leaders especially, are people firmly believed in the strict law of cause and effect. Furthermore, taking money from a Buddha’s organisation will certainly multiply the amount of bad karma one make. I don’t think anyone dare, even if the opportunity arise.

I am an accountant, and I am also a Buddhist. From what I learnt in Buddhism, the three poisons of greed, anger and stupidity are all there in everyone’s life. The higher the position a person is, the more he will be tempted by the dark side. Heard of the quote that ‘adversity doesn’t change a man. Power does’? It’s true.

Faith organisation cannot be used as an excuse not to practice good governance. Throughout history, we can learn that corruption of the worst kind, almost without exception, happened in religious organisations. One reason is that the level of trust towards religious leaders are much more than other. Thus, we often do not question or scrutinise the things that are being done or said.

And when some one does, he can be easily dismissed by reasons like ‘Trust the Sensei appointed GD’ or ‘Don’t believe the lies by the Devil of the Sixth Heaven, out to disrupt the unity of our organisation by sowing distrust.’ Many buy it.

Question 6 – So, how much are talking about here? The amount of money I mean. Can give me a ball park figure?

I can only give some rough estimates. Given the information I got from 2015 accounts, a total of RM350 million was in fixed deposit. Interest earned for that year exceed RM10 million. This makes sense, given the market interest rate of 4%.

From these figures, we can get some rough ideas of how much money we are talking about here. If 21% is equal to RM11.5 million, assuming that our Fixed Deposit unchanged since 2015, then our total contribution (Gokuyo) and membership subscription (Kofu fund) will be approximately RM38.3 million.

This means the total amount SGM received from interest and contribution is RM49.8 million (70% + 21%). Total income would come up to approximately RM54.8 million.

Out of this RM54.8 million, 40% (RM21.9 million) is unused, and add to Fixed Deposit in 2016. If not for the construction of SGI-ACEC in Johor, which took up 28% (RM15.3 million), we would be looking at a much larger amount being put into our Fixed Deposit.

Question 7 – That’s a lot of money. Can I ask for the actual accounts? The one that was audited by Horwarth Crowe, our appointed external auditor?

I tried. Not successful. I got two answers when I asked two different General Council members. First answer, I was not a FULL MEMBER, therefore, not entitle to any rights to the accounts. No further explanation was given apart from that.

Then, ‘How can I be a FULL MEMBER?’ I ask. I need to go through two stages. First, be an associate member for two years, and then get a FULL MEMBER to invite you. The decision ultimately rest with the General Council. The decisions are not based on any clear nor stipulated criteria, but a moving goal post. Much rest on how much the General Council  members feel they know and can trust you.

This is a recipe for cronyism, as the role of a watchdog and keeping the General Council in check by FULL MEMBERS will never be effective if they are populated by those in the inner circle. They will also lose any credibility.

Second answer, the accounts submitted by SGM to the ROS (Registrar of Societies) are according to the Law in Malaysia. No need to go through the rigour of a corporate  organisation, as the ROS only requires a simple Balance Sheet and Income Statement. There is no need to show the accounts to anyone else.

Answers like this, I feel, are high-handed and wrong. It was also puzzling to realise that I am not a ‘member’ in SGM after all these years. Which means I have no say whatsoever in how the money contributed is being used, managed and allocated. I am not sure about you, but I don’t think I can trust SGM with my money given the degree of governance currently.

Question 8 – What would you like to see before you can trust SGM and contribute money again to SGM?

My take is that money is a means. It is meant for kosen-rufu activities, not just to add into Fixed Deposit and thump our chest and say that Kosen-rufu in Malaysia has a solid foundation, materially speaking. That’s not the point.

So, SGM must state in detail, what is their plan in Malaysia, how much money is needed to carry out this plan. They can have big plans and we can all contribute. But now, we don’t seem to have one and in 2016, we collected in excess of RM20 million. It may sound good to a businessman, but for a religious organisation, large amount of money only increase the potential of abuse and corruption. More so with the total lack of control and governance, and a top leadership that regards the membership as little kids.

I would also want to see changes in the governance, particularly on the overall structure of the organisation and the various checks and controls. Separation of powers.

Currently, we have the same few individuals in all the major committees. Way too dangerous. Will share more on that in future. This do not provide proper checks and control on the operation of the organisation.

 

 

 

 

 

 

 

6 thoughts on “SGM money matters: An interview with the accountant

  1. From one reader
    I agree with SGM not publishing full set accounts in cosmic. Cosmic objective is for faith. Not an annual report for financials.
    But for the sake of transparency. SGM should have a policy of allowing ordinary practitioners to visit BK to view the annual report on financials. Also assign staff to explain to clarify any queries to the members. After all, this is part of members’ services too.

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  2. The reason, why SGI or SGM has become what it is today, is because Practitioners of Nichiren Daishonin have not been encourage nor been reading his major writing and are therefore not practising and transmitting his teaching correctly

    The Major Writings of Nichiren Daishonin Vol 6 pg 107 stated very clearly, “And though people may claim to be disciples of Nichiren, if they do not possess some proof of that from my hand, you must not trust them.”

    As for Donations. . .

    Vol 6 pg 218 – 219 stated very clearly:
    “Question: For practitioners in the Latter Day of the Law, who have just aroused the aspiration for enlightenment, what types of practice are restricted?”

    “Answer: Such persons are restricted from practicing alms-giving, the keeping of the precepts and the others of the five paramitas, and are directed to chant Nam Myoho Renge Kyo exclusively.”

    Yet when one questions the Leaders on said, it’s truly shocking to hear their answers, “since the members wanted to donate we couldn’t stop them”😓

    As for the issue on Master and Disciples or Mentor and Disciples, Major Writing of Nichiren Daishonin Vol. 5, pg 223 clearly state that, “A discipline must speak out when his master goes astray.” The Lotus Sutra states, “We do not hold our own lives dear. We value only the Supreme Way.”

    Yet, the Leaders of SGI and SGM has completely distorted it.

    So whom should we trust to practise and transmit the Daishonin’s teaching correctly? ?

    Vol. 6, pg 268 – 269 clearly states, “In general, there are three kinds of messengers. The first kind is extremely clever. The second is not particularly clever but is not stupid, either. The third is the kind who is extremely stupid but nevertheless reliable.”

    “Of these three types, the first will commit no error (in transmitting his message). The second, being somewhat clever but not quite as clever as the first type, will add his own words to his Lord’s message. Thus he is the worst possible type of messenger. The third type, being extremely stupid, will not presume to interpolate his own words, and, being honest, will relay his Lord’s message without deviating from it. Thus he is in effect a better messenger than the second type, and occasionally may be even better than the first.”

    So, let’s chant to practise and transmit the Daishonin’s teaching correctly by reading his Major Writing.

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    1. Thanks, Sue. We fully agree that we must make the Gosho as our basis and strengtehn our understanding to practice correct faith. Especially crucial when disagreement and problem arises.

      Question: For practitioners in the Latter Day of the Law, who have just aroused the aspiration for enlightenment, what types of practice are restricted?”
      “Answer: Such persons are restricted from practicing alms-giving, the keeping of the precepts and the others of the five paramitas, and are directed to chant Nam Myoho Renge Kyo exclusively.”

      The entire Gosho, read here:
      http://www.nichirenlibrary.org/en/wnd-1/Content/94#para-19

      Vol. 6, pg 268 – 269 clearly states, “In general, there are three kinds of messengers. The first kind is extremely clever. The second is not particularly clever but is not stupid, either. The third is the kind who is extremely stupid but nevertheless reliable.”

      The full Gosho here:
      http://www.nichirenlibrary.org/en/wnd-1/Content/171#para-7

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  3. From a reader
    Q7. According to the original 2030 plan, which SGM took pain to do a roadshow in all states. It was discussed and explained that the nomination comm in the General Council is supposed to come up with the criteria for full member application. Due process to follow. Make public those processes in order to be transparent.
    But what is happening to that now? No indication of it going to materialised. Rhetoric not matching with actions and actual proof. President of SGM General Council Michael Kok, hope you can provide some clarification here.

    Liked by 1 person

  4. The monetary contribution all belongs to each one who contributed, it doesn’t matter how much, it’s matter of sincerity remember, so naturally each one of them have the right to know the accounts and how true money are brewing utilised. It is as simple as that, don’t complicate it. What is there to hide?

    Liked by 1 person

  5. All said and done, cry and hew…they are still in power. And fortunately for them, there are still people who supports them, either blindly or something to gain. The base of human nature is survival, in whatever way possible, good or bad. Hence, the many mind boggling steps taken by the “BOD” to silence dissenters.

    Actually, one sure way of finding out if the top leaders are on the take, is to see their lifestyle and their connectivity with the “BOD”. In the corporate world of CBT, how offenders are caught is to observe their lifestyle, and observe what they do. There will be subtle hints that shows a person is on the take.

    Maybe we should just observe them, see what kind of business they do and if their business has links with the organization. And hope someone whistle blows.

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