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 (NKF) in Singapore. 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). Among the revelations which came out during the trial were that Durai was earning over S$600,000 per annum for his role as head of the charity, had taken first class air travel on business trips when he had previously insisted that he did not do this (and sued members of the public who claimed he did), and that 'gold-plated taps' and pricey German toilet bowls had been installed in his private office at the NKF's expense. Even the maintenance bills for his wife's Mercedes also came from NKF funds.
Durai has also since been arrested and is awaiting charges under Singapore's Prevention of Corruptions Act.
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[edit] Controversies surrounding T T Durai and the NKF
The NKF and its CEO T T Durai sued SPH and its senior correspondent Susan Long over an article published in The Straits Times on 19 April 2004.
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 Mr 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 Straits Times did not say who the man was.
Four days after the article appeared, the NKF, led by CEO TT Durai, served a writ on the newspaper. 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. T.T Durai had the gold tap replaced with an ordinary steel one the week after the article was published.
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.
The Plaintiffs, the NKF and its CEO TT Durai, were represented by Senior Counsel Michael Khoo. The Defendants, Singapore Press Holdings and Susan Long, were represented by Senior Counsel Davinder Singh.
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] KPMG's report on investigation into the National Kidney Foundation (NKF)
DOWNLOAD FULL REPORT: http://www.nkfs.org/download/nkf_report_161205.pdf
Facts and Figures
• In 1995: Pay was increased from $12,000 to $18,000. The promotion was back-dated 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.
• Sept 1997 - Oct 2003: Overtime pay amounted to $187,000
• May 1995 - Nov 2003: Encashing his leave entitlement brought in another $350,000.
• In 2004: Chalked up an average bill of $32,952 per month on his corporate credit card.
• In 2004: $70,000 "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 to be given free to "nurture" donors
• Staff received pay increments as many 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.
• TT Durai had used NKF funds to pay his wife's Mercedes' maintenance bills. This including paying for petrol and repairing the car.
• In 2004: NKF made profits of $993,677 from drug sales. Although the 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.
Source: CNA (http://www.channelnewsasia.com/nkf/)
[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.
Singh asked: 'So in addition to the travel and the reserves, we now know that even the number of patients that were being put out as being treated by NKF was erroneous and remains uncorrected; right?' Durai replied: 'Yes.'
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 and not of T. T Durai's.
The NKF, including chairman Richard Yong, had maintained that senior executives fly 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 was 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.
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] 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] Charged 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 $50,000 which was posted by his wife.
[edit] See also
[edit] External links
- Official website of the NKF
- The NKF: Controversially ahead of its time?, a posting on an Internet forum of Susan Long's April 19, 2004 report in The Straits Times. (Note: the forum discussion link on channelnewasia.com is now dead. This link is still kept here, though for an "FYI".)
- Ministerial Statement by Health Minister Khaw Boon Wan in the Parliament of Singapore
