T. T. Durai

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Thambirajah Tharmadurai (born 1948), which means a charitable man in Tamil, better known as T. T. Durai, is the former Chief Executive Officer of the National Kidney Foundation Singapore (NKF). He is the central figure in the National Kidney Foundation Singapore scandal and is currently on bail facing corruption charges.

Durai was once highly respected as the head of an extremely successful fundraising organisation. But in July 2005, Durai resigned amid controversy following the collapse of a defamation trial which the NKF brought against Singapore Press Holdings (SPH). Various revelations emerged during the trial about spending from the charity's funds on luxury items which appeared to be for the personal use of Durai and his wife.

Contents

[edit] Lawsuit over The Straits Times article

Durai and NKF sued SPH and its senior correspondent Susan Long over an article published in The Straits Times on April 19, 2004. Four days after the article appeared, the NKF, led by Durai, served a writ on the newspaper.

The NKF objected to the first six paragraphs of the article, which carried an account from a plumber who worked on the attached bathroom of Durai's private office suite. The plumber said he "lost it" when he had to install, among other things, "a glass panelled shower, a pricey German toilet bowl and a gold-plated tap". The article said the taps were "scaled down" after his outburst.

When contacted regarding the plumber's story, the NKF responded that it was "difficult for us to give an answer to enlighten your readers" since the newspaper had not said who the man was. Durai had the gold tap replaced with a steel one the week after the article was published.[citation needed]

The NKF claimed that the paragraphs implied it had misused funds collected from the public and splurged them on its CEO's office; that it mismanaged public donations; that it had "scaled down" the installations only because the plumber protested; and that it avoided providing details on the alleged incident.

The Straits Times argued that the alleged incident was true, and therefore justified publishing, and that the entire article was not defamatory but a fair comment on the lack of transparency and controversy surrounding the NKF.

Two days into the trial, which had been scheduled to last ten days, the NKF withdrew the defamation suits against SPH and the journalist.

[edit] NKF's reserves

The court was told that the NKF's reserves stood at S$262 million as of July 2005.

SPH's lawyer Davinder Singh said during the trial that the NKF had been telling Singaporeans its reserves would not last more than three years, according to statements made by its officials. However he argued that if the NKF stopped all fundraising activities and concentrated on treating kidney patients, it would still have enough money to see through its operations for 30 years, based on its expenses scheduled for 2003.

In June 2005, the NKF had told The Straits Times that it needed about S$2,600 per month to support each of its 2,000 patients, a total of S$62.4 million per year. The charity cited those figures to bolster its argument that its reserves were not excessive. Based on its expenditure of more than S$60 million a year for dialysis, the reserves would last 3 years, it said. But on 12 July 2005, during the defamation case the NKF had launched against SPH, the court was shown how the NKF in fact spent far less on dialysis than the public had been led to believe. According to its 2003 audited financial statement, the NKF spent S$31.6 million that year on dialysis and transplantation. Of that amount, S$22.9 million came from dialysis fees it collected from patients and a further S$1.5 million came from other related income. So NKF was out-of-pocket by only S$7.2 million.

Durai initially disagreed with Singh, saying that no-one could be sure patients would continue to pay their share for the treatments. But he finally agreed that the NKF's assertion that the reserves would last only three years was 'not accurate'.

Singh noted that even if the NKF had to foot the entire dialysis bill of $31.6 million a year, its current reserves of S$262 million would last more than 8 years.

[edit] Number of patients the NKF served

Davinder Singh argued that the NKF had overstated its patient numbers, and this would have given the impression to the public that more funds were needed to run its operations.

In May 2004, Health Minister Khaw Boon Wan informed Parliament that the NKF had treated 1,414 patients in 1999 and 1,512 patients in 2003. A letter written to The Straits Times in April 2004 by the chairman of its Children's Medical Fund board, Dr Gerard Chuah, had claimed that the NKF had 3,000 patients. Singh pointed out the number had been overstated by about 1,000. Durai said he realised there was a mistake only after the letter had been published, but had not corrected it.

During questioning Durai admitted that an overestimate had been made and not corrected. When asked why he had done nothing to correct it, Durai said: "It was an oversight. I did not think it was of material importance. The donor gives us money because of the brand of the NKF and I did not think it was so important at that point of time to correct this error."

Singh suggested that the number had been inflated to create a false impression of need. In fact, according to Khaw's statement in Parliament, the NKF's "share" of kidney patients in Singapore had dropped, from 54% in 1999 to 44% in 2003.

[edit] Durai's salary

T.T Durai was paid a monthly salary of S$25,000 in 2002 and received 10 months performance bonuses (S$250,000) for that year, making a total of S$550,000 for 2002. He was paid a monthly salary of S$25,000 and received 12 months performance bonuses (S$300,000). He was paid a total of S$600,000 in both 2003 and 2004. He was paid a total of nearly 1.8 million Singapore dollars in 3 years from 2002 to 2004. These figures were closely guarded secrets until the court case. There were many occasions when he declined a pay rise but was paid the offered increase in salary, backdated to the time he was offered the pay rise, the following year.

Singh said Durai had tried to give the impression in his affidavit that he was being thoughtful when he agreed to come on board as CEO in 1992 for just $12,000 a month even though he had been offered $20,000. The truth, Singh said, was that Durai had agreed to the lower pay in exchange for freedom to earn extra income outside the NKF. Durai testified that his earnings were up to the board of directors to decide, admitting that he was unethical but arguing that he was not to blame for accepting them.

[edit] First class air travel

NKF volunteer Archie Ong and aero-modelling instructor Piragasam Singaravelu, both of whom had said that they had seen Durai travelling in first class on airlines while making NKF business trips, were taken to court separately in 1998. Both apologised and paid damages and costs to the NKF after realising they were effectively fighting a losing battle against the unlimited monetary resources of the NKF.

The NKF, including chairman Richard Yong, had maintained that senior executives flew business class for long-haul flights.

Durai told the Singapore court on 11 July 2005 that he does in fact fly first class. For the past two years he has been entitled to a fare equal to Singapore Airlines business class rate – which can translate to first class on other airlines. Previously, he paid the difference himself.

[edit] Cars

It was revealed during the trial that the NKF had a fleet of eight cars with company drivers and Durai was one of six officers who could make use of them at any time. The office cars were also used to transport VIPs and guests of the charity. In his sworn affidavit, Durai said that the office fleet was used by officers who had to visit NKF facilities to attend to the needs of the centres and patients. Durai also had his own Mercedes-Benz 200 car for his personal and family use, and his wife also drove it. But the NKF paid the car's road tax and picked up the bills for maintenance and repair.

Singh questioned Durai on the cars. Durai said that, as CEO, he was entitled to use any of the cars any time he wanted. He also admitted that he had used the office cars for personal use.

[edit] Durai's undeclared directorships outside the NKF

While Durai worked full-time as CEO of the NKF, he was also a director of a number of other companies. He was paid sums of up to S$25,000 a year by them, over and above his NKF remuneration package. He never told the NKF board about some of these, and did not list these directorships in his curriculum vitae.

It was also revealed that Durai had a business relationship with Matilda Chua, a one-time employee of the NKF, who left to start her own company. Not only did he invest in her business, but the NKF also gave her telemarketing contracts, and she eventually became a member of the NKF board as well.

When Singh produced Durai's CV and asked if it were complete, Durai answered: 'Not exactly.' He disclosed that he had once worked for a company known as Bonyad Marketing Industries, which he described as an Iranian charity, for S$7,000 a month. [A December 1995 article in The American Spectator [1] describes Bonyad Marketing Industries as a "special arms trading company" that had "in addition to spare parts for Iran's U.S.-built F-4 and F-5 fighters ... been purchasing large quantities of Hewlett Packard and Sun SparcServer computers for use in Iran."] He said he was its representative in Singapore from 1990 to 1992, but decided to give that up when he became NKF's chief executive. Durai admitted that in 2000 he had invested in Ms Chua's company, Global Net Relations, but did not disclose to the NKF board that he was a director of the company.

Singh then probed him on the director's fees he had collected while he was working full-time as the NKF's CEO.

Durai said he was paid S$25,000 a year each as a director of Amcol Holdings between 1990 and 1996 and an Australian company, Overseas & General, "for a couple of years". He also received "some nominal sum" as a director of MediaCorp TV Channel 12.

Singh told him: "The position is this: While you were expected to be and paid as a full-time CEO, you were earning fees outside NKF which were not disclosed to the NKF or to the public."

Durai replied: "That's correct. The NKF board gave me the liberty to do so."

Singh continued: "Mr Durai, your CV is yet another illustration of the lack of transparency with which you operate. You do not come clean on what you do, you do not tell the board what you do, how much you earn. You do not tell the board about your commercial relationship with a person who has a contract with the NKF. Is that transparency?"

Durai said: "They were not very consequential, in my opinion." He said it was not necessary for him to disclose to the board and added that the directorships were "just appearances".

[edit] Subsequent fallout and public backlash

Just after the trial, when Mrs. Goh Chok Tong, patron of the NKF, was interviewed, she commented that "$600,000 per year is peanuts compared to the reserves the NKF has.". This then sparked The Peanut Controversy, in which the public was irked by this comment. The public then called for her to apologise for this statement, in which Senior Minister Goh Chok Tong did on behalf of his wife. Mrs Goh, apparently has now realised the importance of words and its impact thus, recently has denied any knowledge on knowing about Mr Durai's salary before the scandal erupted. However, she has not apologised to the public personally for her statement, leading some to think Mr. Goh was just covering up for her in her capacity as an ex-Prime Minister's wife.

The organisation's signboard in front of NKF HQ in Kim Keat Road was vandalised after the scandal broke out.
The organisation's signboard in front of NKF HQ in Kim Keat Road was vandalised after the scandal broke out.

In days following the trial, around 30,000 donors terminated their monthly contributions to the NKF. An online petition was set up, calling for Durai to step down, which, as of writing, has 43589 signatures on it. The morning after the trial, the wall outside the NKF headquarters in Kim Keat Road was vandalised by an unknown person, most probably angered by the lack of transparency in NKF. Spray painted all over the wall were the words 'liar'. On one wall, the words "骗子" (Liar) and "大骗仙" (God Of Liars) were spray painted in Chinese characters along with the Malay words 'Hang Turi', the misspelling referring to Durai. The NKF signboard was also vandalised with the words "liar" spray painted in both English and Chinese. The graffiti was quickly painted over and the affected areas of the signboard was quickly covered up. These acts were severely condemned and investigations are still currently being carried out.

On 14 July 2005, Durai and the NKF Board met with Health Minister Khaw Boon Wan to discuss the future and were told that 'business as usual' would not do. The evening, the NKF called a press conference at which Durai and the entire NKF Board announced their resignations.

An interim board was appointed by the government to keep the organisation going and begin the task of restoring public confidence. Dr. Gerard Ee was appointed as interim chairman to oversee the restructuring of the NKF and Professor Goh Chee Leok has taken over the post as interim Chief Executive officer. Prof. Goh has described his service to Singapore as a National Service which he intends to ensure that the NKF cleans up its act fully. Together as a team, they face a mammoth task of convincing the general public to continue to donate to the NKF.

[edit] KPMG investigation into NKF

The international accountancy firm KPMG investigated the business activities of NKF and issued a report on 16 December 2005 including the following conclusions[1]:

  • In 1995 Durai's pay was increased from $12,000 to $18,000. The promotion was backdated six months, so he received another $36,000. On top of that, Durai received a $30,000 bonus "top-up" based on the revised salary.
  • In 1997 Durai was offered a salary of $30,000 a month but he chose to accept only $25,000, a $7,000 increase over his previous wage. The increment was backdated 11 months, amounting to an extra $77,000.
  • From September 1997 to October 2003, his overtime pay amounted to $187,000.
  • From May 1995 to November 2003, he encashed his leave entitlement brought in another $350,000.
  • In 2004 Durai chalked up an average bill of $32,952 per month on his corporate credit card.
  • In 2004 $70,000 was spent on a "study trip" to Las Vegas for six of NKF's staff, including Durai, to get fresh ideas on doing charity shows.
  • In 2004 $430,000 on movie and concert tickets were given free to "nurture" donors
  • Staff received pay increments as often as four times a year. Former director Matilda Chua's salary rose from $1,300 to $12,500 over nine years.
  • Staff were given exit payments of up to 10 months' salary.
  • Durai used NKF funds to pay bills relating to his wife's Mercedes, including paying for petrol and repairing the car.
  • In 2004 NKF made a surplus of $993,677 from drug sales. Although NKF claimed it helped its patients save over $3.5 million in treatment costs, it had charged its patients a premium for certain discounted drugs, instead of passing the savings on to them.

[edit] Private life

It was reported that Durai spent much of his time reading at home and spending time with his wife, two sons, who are serving National Service, and his daughter who is currently studying at a junior college. Before the KPMG report was out, his daughter wrote a passionate letter to the news media, pleading for the public to restore honour to her father. He refrains from reading newspapers and watching television after the controversy.

Durai said that he is prepared for the worst, referring to any legal charges that would be laid on him.

[edit] Charges and bail

Durai was formally accused of having submitted false invoices between 2003 and 2004 to the NKF to make claims for various consultancy services which were never rendered. One invoice was for $20,000 and the other, $5,000. Durai was said to have misled the charity by using the false invoices "knowingly . . . with intent to deceive (the NKF)". Anyone who uses a false or erroneous document, which to his knowledge is intended to mislead, is guilty of an offence under Section 6(c) of the Prevention of Corruption Act. Durai was released on bail of $100,000 which was posted by his wife.

On June 11, 2007, Durai was found guilty of misleading the charitable organisation with a falsified invoice of $20,000 which was allegedly for interior design consultancy work done by David Tan, director of the design firm. The invoice, dated December 29, 2003, was meant for work done for various dialysis centres. For this, Durai was sentenced to three months in jail on June 21. He could have been jailed for up to five years and fined $100,000. He is appealing against this sentence.

A second charge, concerning the $5,000 invoice, was considered on June 27[2]. The money was allegedly paid to a company called Decision One International, in September 2003, for finding suitable candidates for a senior management position in the organisation. However, investigations reveal that no such service was rendered to NKF.

[edit] Dengue fever

On July 16, 2007, Durai was admitted to National University Hospital after contracting dengue fever[3]. His condition is reportedly stable[4].

[edit] See also

[edit] References

  1. ^ KMPG report, accessible from Channel News Asia Channel News Asia website
  2. ^ Forss, Pearl. "Durai back in court to face another charge of deceiving NKF", Channel News Asia, 2007-06-27. Retrieved on 2007-07-16. 
  3. ^ Foo, Siew Shyan. "Former NKF CEO Durai warded in NUH for dengue", Channel News Asia, 2007-07-16. Retrieved on 2007-07-16. 
  4. ^ Cheney, Satish. "Former NKF chief Durai's condition is stable: NUH", Channel News Asia, 2007-07-17. Retrieved on 2007-07-20. 

[edit] External links