Entellium Scandal and more…
Another scandal, which like any other scandals before this (e.g. InventQ Jaya scandal), will be forgotten in time.
Mavcap, MDeC clarify positions on Entellium scandal
by Nadia S Hassan
KUALA LUMPUR: Multimedia Development Corp Sdn Bhd (MDeC) and Malaysian Venture Capital Management Bhd (Mavcap) are still mulling over what course of action to take over disgraced American company Entellium.
In emailed responses to The Edge Financial Daily, representatives from both MDeC and Mavcap said they were keeping an eye on the situation.
A week ago, Entellium?? chief executive officer Paul Thomas Johnston and chief financial officer Parrish L Jones were arrested by the US Federal Bureau of Investigations and subsequently charged with inflating revenue figures to entice investors to invest millions in their enterprise.
??e are aware of the latest development and based on information currently available to us, we understand that the company in Malaysia is still in operation,??said MDeC?? vice-president of its capacity development division, Ng Wan Peng.
Mavcap CEO Husni Salleh said: ??avcap is currently monitoring the developments and we are working with other investors to determine the appropriate steps to be taken in due course.??r
It was reported recently that Mavcap and MDeC were in a quandary over their involvement in the software company.
In June, Mavcap had extended a US$2 million (RM7 million) bridging loan to Entellium, while MDeC had given the company a RM7.5 million MSC Malaysia Star Grant for research and development.
Ng explained that Entellium?? Malaysian unit, Entellium Technologies Sdn Bhd, given its MSC status was eligible to apply for the various incentives made available.
??he approval for the grant was based on the technical merit of specific R&D projects to be undertaken by Entellium Technologies. With regards to the grant and the projects, the deliverables are on track and progressing as committed,??said Ng.
For MDeC, the good news is that the funds were given on a milestones basis.
??s at today, only a limited portion of the fund has been disbursed to the company,??said Ng.
Asked how Mavcap had come to invest in Entellium, Husni said: ??he investment opportunity in Entellium was first presented to us at the end of last year. As with every investment we made, we had undertaken as much evaluation based on the information shared by the software company as well as other investors involved.??r
Husni said Mavcap had taken into consideration the amount put in by other investors as well as data from the company.
??n an effort to profit from this investment, and to help assist a Malaysian MSC-status company that had successfully penetrated into the US market, Mavcap?? investment committee approved the investment in June,??he added.
In the article above, the author has failed to reveal one common symptom that is all too common with MDeC and MavCap: both of these organisation suffers from acute White Man Superiority Syndrome. I have personally witnessed how taxpayers money are being “invested” into these whitemen-owned businesses without proper due-dilligence conducted on the feasibility of the business models. Of course, such scandals are also prevalent amongst local fraudsters.
Don’t you think that the amount of scandals and frauds are way too many? I mean, these are not companies that performed below expectations or had problems with cashflow or facing business operation issues. Rather, these companies are run by fraudulent individuals, who never had a proper business model to begin with.
My question is, doesn’t MDec or Mavcap uses a competent team that looks into the business model before investing the first Ringgit? It’s millions of ringgit at stake here! Of course, if it’s not your own money, you are likely to be careless about spending it. But these scandals are happening too frequently and the amount are getting astronomical. Can’t help but sensing there’s more than meets the eye.
The author above also mentioned that it’s good news for MDec because MDeC disburses the fund in milestone basis, so at least the loss is not as bad as MavCap’s. I beg to differ. So many local entrepreneurs could make do with the RM 2 million help, but because these local entrepreneurs lacks the white men’s accent, most of them are given the cold shoulder treatment.
Enough with the White Man Superiority Syndrome. Malaysian entrepreneurs has got much more to offer if these venture capitalist would just look at the business models and not who is making the powerpoint presentation.