EVEN THE CRONIES START TO FEAR – TYCOON VINCENT TAN’S BERJAYA GROUP & TAN CHONG START AUSTERITY MEASURES INCLUDING PAY CUTS

KUALA LUMPUR (Bernama): More local corporates have started to implement austerity measures to sustain their operations during the movement control order (MCO) imposed by the government to curb the Covid-19 pandemic.

Aside from the pandemic, companies are seen to be cautious on other challenging factors, such as the expectation of an impending global recession this year.

According to documents sighted by Bernama, Tan Chong Motor Holdings Bhd (TCMH) and Berjaya Corp Bhd have decided to implement austerity measures to protect the companies.

TCMH’s independent directors have offered to reduce their fees with immediate effect during its current zero revenue period, while senior management employees will also be taking salary cuts of between 20% and 30%.

According to the document, Tan Chong group president Datuk Tan Heng Chew said the group would review the measures periodically until the situation returns to normal.

Tan said additional measures might be announced to sustain the business if the situation is prolonged or worsened.

He said the group’s businesses in Malaysia have been greatly affected by the MCO since it began on March 18.

The group also envisaged that its business operations in Indo-China will be impacted as various lockdown measures are being imposed by the authorities, while the impact on social economic activities will last for a period of time to come.

Tan said although government assistance has been given to small and medium-sized enterprises (SMEs) and some industries, the group, however, has not been able to leverage any of the assistance or support.

Meanwhile, Berjaya group has taken a more comprehensive approach by implementing austerity measures effective April 1-June 30, 2020 for all companies under the group.

The exercise entails pay cuts, the percentage of which to be based on the employee’s salary range bracket, and a reduction of fixed monthly allowances.

The group has also required employees to take unpaid leave or annual leave on every Friday, from May 8-June 30, 2020.

Meanwhile, offices for Berjaya’s subsidiary companies will be closed on three Fridays in a month until June 30.

According to the memo, Berjaya executive chairman Tan Sri Vincent Tan said the group management would discontinue the austerity measures and evaluate the reinstatement of the salary and monthly allowances once the group’s business performance recovers to the pre-Covid-19 level.

“However, if the group’s businesses and revenue could not recover near to the pre-Covid-19 level performance by then, primarily due to further extension of MCO by the government, the austerity measures may be extended,” he added.

– Bernama

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