SCCA 2103 LEADERSHIP COMMUNICATION

GROUP A
SECOND SEMESTER SESSION 2017/2018 (A172)

GROUP ASSIGNMENT:
YAYASAN AL-BUKHARY

PREPARED FOR:
DR. JOYCE CHEAH LYNN-SZE
PREPARED BY

NO. MATRIC NO. NAME

1 238529 NUR SYAHIRAH BINTI PANUT

2 238613 NUR NINA SYUHADA BINTI MAT RANI

3 238704 NURUL SHAZALIANA BINTI ADNAN

4 238930 ANNUAR BIN KANTI

5 239093 NURUL NADIAH BINTI MUHAMMAD YUSOFF KHIRI

Submission date:
30th APRIL 2018

SCHOOL OF MULTIMEDIA TECHNOLOGIES &

COMMUNICATION
COLLEGE OF ARTS & SCIENCES
UNIVERSITI UTARA MALAYSIA
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Table of Contents
1.0 Introduction ...................................................................................................................2

2.0 Al Bukhary Foundation ................................................................................................3

3.0 Story About Your Protagonist .....................................................................................4

4.0 Problems in Leadership Contexts ................................................................................5

4.1 The Lack of Coordination .........................................................................................5

4.2 Syed Mokhtar’s Massive Debts Worry Investors ...................................................6

5.0 Decision Making in Leadership Contexts ...................................................................7

5.1 The Lack of Coordination .........................................................................................7

5.2 Syed Mokhtar’s Massive Debts Worry Investors ...................................................8

6.0 Conclusion ......................................................................................................................9

7.0 References ......................................................................................................................9

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1.0 Introduction
In 2014 there is an issue arises which Albukhary International University (AiU) located
at Alor Setar, Kedah is being shut down because of the dissatisfaction of student regarding
the programs offered and the management issues. A total of 600 hundred students have been
told to pack up and transfer to another university as UiA need to be shut down. According
to the representative of AiU, they were advised to restructure in the early stage but later the
Ministry of Education advised them to close the institution. During the arises of the issue,
the representative said that the closure may be permanent or temporary but they are still
waiting for further instruction from the ministry (Michelle, 2014).

The Albukhary International University was founded by Syed Mokhtar Albukhary in

2010 and it is a private higher education institution located in the small city of Alor Setar,
Kedah. The university offered foundation studies and degree in Banking and Finance,
Business Administration, Information Technology and Computer Science and all of the
courses offered are officially accredited and recognized be the Ministry of Higher
Education. AiU offers courses and programs leading to officially recognized higher
education degrees in several areas of study. From more than 50 countries has been enrolled
in this international university with about 75% of them are foreigners and every student
holds a scholarship from the foundation (Michelle, 2014).

Students and staff of AiU face the uncertainty for the past few months because of the
speculation regarding the financial issue and it would be sold. On February 2014, the staff
was reported that the campus will be close and they need to find a new job. The university
also has stopped the enrollment of new students by using admission page on its website
“closed for maintenance”. Other than that, all the AiU were informed that they will be
transferred to other private and public institutions. The representative of AiU denied that
the closure of that institution is because of the university face financial difficulties, was
almost bankrupt and would be sold an added that the foundation now has spent more fund
to transfer the students and pay higher tuition fees for them in other private universities and
colleges (Michelle, 2014).

However, as stated by second Minister of Education, Datuk Seri Idris Jusoh, the decision
to stop the operation which is scheduled in June will not be happen as the management has

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made the decision to carry on their operation. He said that, the matter was informed by the
management of the institutions to the ministry through a letter (Michelle, 2014).

2.0 Al Bukhary Foundation

Al Bukhary Foundation was established in Mac 1996 by Tan Sri Syed Mokhtar al Bukhary
as a welfare body that plays a role in helping the poor, contributing to the development of
Islamic art and culture and also promoting understanding between civilizations. The main
objectives of the establishment of the foundation is to encourage the companionship of
Islam. Al Bukhary Foundation consist two parts, the first part is carries out charity works
while another part runs the fund distribution from each company that Tan Sri Syed Mokhtar
involves with. Until today the al Bukhary foundation has spent more than 300 million on
religious, cultural and educational activities. The primary focus of al Bukhary Foundation
is education as a means to empower the poor as well as forge greater understanding between
Muslim and non-Muslim communities. From 1996 to 2010, al BUkhary Foundation has
donated almost $1 billion to charity project such as humanitarian project in Asia and Africa,
including rebuilding the lives of Afghanistan refugees, Pakistan’s ear’s tsunami victims and
operating an AIDS hospital in Uganda. Among the Foundation’s initiatives are the al
Bukhary Tuition Program for poor underachievers and the Al-Bukhary Scholarship Program
for poor high achievers .

The main project of al Bukhary Foundation is the construction of al Bukhary project that
cost around RM 400 million located at Kedah. The main function of the complex is to give
is to give various facilities such as mosques, medical centers, community centers,
orphanages, special academies for seniors and center for institution of high education. Other
than that, Kuala Lumpur Islamic Art Museum in Kuala Lumpur also one of the main project
of al Bukhary Foundation. The construction of the museum cost about RM 100 million and
it is the first museum in the Asia Pacific region featuring Islamic art. The a Bukhary
foundation also have builds a total of 12 mosques around the country. In 2000, al Bukhary
Foundation donated a total of RM 7.75 million to Oxford Center for Islamic Studies, a world
renowned Islamic learning center. The Foundation also assisting the Maju Institute of
Educational Development (MIED) to establish the Asian Institute of Medical, Science and
Technology (AIMST) in Sungai Petani, Kedah.

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The involvement of al Bukhary foundation in non-Islamic projects also developed. Despite
the fact that the Foundation emphasizes on Islamic charitable projects, it also contributed to
the projects undertaken by non-Muslim organizations. For instance, al Bukhary foundation
donated almost RM 1 million to the Langkawi Project, that initiated by MCA to raise funds
of rural educations projects and also provide scholarships to underprivileged students.

3.0 Story About Your Protagonist

As all of us know that, Tan Sri Syed Mokhtar Al-Bukhary is one of the most well-known
tycoons and the richest Malay corporate figure in Malaysia. He was born on 12th December
1951 in Alor Setar, Kedah at middle class family and his family hailed from Hadhramaut,
Yemen. In the mid-1940s, his father travelled as far as Central Asia to trade and then he
went to Thailand, before making a final decision to live in Alor Setar.

Syed Mokhtar is the third child from seven siblings and because of the shortage of
money, he was send to live with his uncle, Syed Omar in Johor Bahru to continue his study
there. He continued his study in Johor Bahru until form two, before returning back to Kedah
to study up to form five at Saint Micheal’s School and he never went to university. But, that
do not mean he is lack of knowledge because a whole lot of his knowledge and experience
was gained through his own entrepreneurship experience during his youth time. He started
working when he was studying where he helped in the planting of vegetables and selling
them in the market while he learnt book keeping through assisting his father.

According to Forbes, with an estimated net worth valued at US$1.63 billion he manages
the core of his multi-billion-dollar empire through a well-diversified portfolio, comes from
stakes in listed conglomerates MMC Corporation Berhad, DRB-HICOM Berhad and
Tradewinds (M) Berhad. MMC's operations span ports, logistics, construction and
engineering; DRB-HICOM is an automotive giant that is also into property and education;
and Tradewinds focuses on the plantation agricultural industry. Through DRB-HICOM,
which owns car maker Proton, sold a 49.9% stake in Proton to Chinese auto group Zhejiang
Geely in 2017. This gave an 86% stock boost.

Besides, Tan Sri Syed Mokhtar Al-Bukhary also have characteristics such as confident
and courage. For instance, in the mid-1980s, his mega business project was interrupted by
the global economic crisis and he incurred high loss as a result of it. However, this business

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failure does not affect his spirit to be a successful entrepreneur. He adapted the situation
without any fear. His aims is to strengthen and expand his business all around the world.
Any failure and business losses that he faced make him become more confident and courage
in handling the business activities and careful to make any future decision. Other than that,
his family business cattle give him beneficial experience in conducting the business because
from that he dares to change his business areas from farm animals to a grocery shop. Then,
he diversified his business more too many areas such as transportations and logistic, cloth,
rice, sugar and so on.

Also, his inspiring and humility characteristics has been prove from his charity
foundation under the name of Al-Bukhary Foundation. It helped to build Islamic Art
Museum valued at RM70 millions as well as building many mosques and charity
establishments in Kedah, Perak and across the country. The foundation also finances
English, Science and Mathematics classes for more than 20,000 underachieving students
every year, as well as running a college scholarship program for 300 students in more than
40 countries. Plus, he also has donated a lot of his profit toward orphan and people who
needed help. He also has donated 1.25 Million Pound to Oxford Islamic Institute for
research on Islam and gives scholarship to 1000 Saudi Arabian student to study in Malaysia.

4.0 Problems in Leadership Contexts

4.1 The Lack of Coordination
The leadership communication problem began in April 2014 where the closing issue
of the Al-Bukhary International University (AIU) based on various issues and
speculations regarding the university faced financial difficulties, and almost bankruptcy,
as well as numerous allegations and speculations made primarily by students studying
at the University also following the issue of scholarships offered by the charity
organizations. however, denied the matter. For example, an employee working in a
company, Tan Sri Syed Mokhtar, said "We have no financial difficulties," he said,
adding that the foundation is now spending more money on transfer funding and higher
tuition fees at other universities and colleges.
The focus of the institution is that it is the priority of the students. Students also
complain about the program and founder of the university (Syed Mokhtar) who want
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students to graduate with good degrees to enable them to get a job. Students are not very
happy, but that's not the main reason we move them and close the university.
The founder hopes they will graduate from universities with lofty standards.
Regarding the complains of students who want to graduate from (AIU) before the
institution is closed, he said the students would not benefit from a university that was
no longer operating. This suggests that there is a problem of misunderstanding
communication given by their leaders to subordinates. It shows low downward
communication that is less effective and efficient.
Often in a well-established organization or can be said when in the organization
there is a very good work program, if there is no coordination it often leads to a
misunderstanding, which can certainly lead to the implementation of a program. Such
disorder can occur when the person in charge does not know the boundaries of his job,
which often can only be obtained through coordination between the responsible person.
That can cause overlapping because some of the committee manages it, in some tasks,
while the vacancy in another task.

4.2 Syed Mokhtar’s Massive Debts Worry Investors

According to FMT news (2016), Tan Sri Syed Mokhtar Al-Bukhary have RM34.5
billion in liabilities has made him one of the country’s biggest holders of corporate debt.
This biggest amount of debit makes the bankers and investors worried about the
potential stress that big conglomerates. It is because of Syed Mokhtar’s controls a
variety range of business starting from power plants to transportation and infrastructure
development and there is also could have on the banking systems. Furthermore, one of
the reason why Tan Sri Mokhtar Al-Bukhary have massive debts due to many of his
business required a huge capital and their infrastructure projects are largely project-
finance debts that are ring-fenced by cash flows.

In an economic model packed with failures and public concessions to protect the
banking systems like the take overs of the Malaysia Airlines and Port Klang Free Zone
(PKFZ), there are fear that Tan Sri Syed Mokhtar Al-Bukhary group might facing the
similar fate should the Malaysian economy fall into a major recession (FMT news,
2016). Besides, this massive debt worries investors because by having massive
corporate debts might leads to financial crisis. For example, in the year 1998, Umno

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crony company which is Renong Bhd collapse due to Asian financial crisis. At that time,
Renong Bhd had debts in excess of RM20 billion which is about 7% of all loans in the
banking system then. When Renong collapse, it caused hundreds of millions in losses
to investors and also it leading to a collapse of the stock market and triggered a RM10
billion bailout of the company by the government. Therefore, many parties and investors
fear about Tan Sri Syed Mokhtar Al-Bukhary massive debts because there would be a
repeat of the Renong crisis and this fear is especially real due to global economic
slowdown and a fallout from the eurozone financial crisis (Sen, 2012).

5.0 Decision Making in Leadership Contexts

5.1 The Lack of Coordination
First of all, as stated above, leadership communication is the core problem for this
issue to be rise. So, in order to solve this issue, Tan Sri Syed Mokhtar Al-Bukhary tried
his best to save this organization. Firstly, regarding the issue of financial occur which
lead to shut down the Al-Bukhary University (AIU). For this issue, Tan Sri Syed
Mokhtar Al-Bukhary explains to the audience at the press conference that financial issue
is not the main reason why they need to shut down the university. They were advised by
the ministry of education to restructure their management and later, he was informed to
shut down the university whether it just for temporary or permanent (Arianna Michelle,
2014).

Secondly, regarding the issue with scholarship and grade for the students, the
organizations try to make new agreement where they need to finish with a minimum 2.5
grade point average in order to receive their scholarships. He said that this decision is
making for the sake of the students in order for them to graduate with good results and
can guarantee to get a job after the students graduate from that university (Arianna
Michelle, 2014).

Lastly is related to the issue of transfer. Because of the late informed from
management to their students regarding the status of the students, management of the
organization try to make sure that all the students can transfer to other universities
whether public or private university. Other than that, they can transfer their credits at
the new replacement university (Arianna Michelle, 2014).

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These are the decision making made by Tan Sri Syed Mokhtar Al-Bukhary towards
these issues. At the end, this university is still working, and this is because the leadership
characteristic shown by him can influence others to stay with him and together fix
everything that had occur in this university. In addition, when these issues occur, Tan
Sri Syed Mokhtar Al-Bukhary is giving late feedback to settle these issues. Actually, he
needs to release an official press statement regarding this issue to make sure there is no
speculations make by others. Other than that, the management should not shut down the
university website because they can use it to release press statement and update
everything related to the students and staff at that website (Mohamed Khaidir, 2014).

5.2 Syed Mokhtar’s Massive Debts Worry Investors

As has been stated above, the decision making made by Tan Sri Syed Mokhtar
regarding that issue is asking government advice in order to explain what measures
should be taken to avoid a collapse situation. Tan Sri Syed Mokhtar asking government
help because many of his business has related with government. So that, when anything
happen, government will help Syed Mokhtar company’s like giving financial support or
any project. For instance, finance ministry can give available data on how much
financial institution and statutory bodies such as Employees Provident Fund (EPF), Civil
Service Retirement Fund (KWAP), Tabung Haji Fund and Armed Forces Fund (LTAT)
can provided loans to Syed Mokhtar’s companies. By having this financial institutions
and statutory body invested in Syed Mokhtar’s company, it can help to reduce the
amount debts facing by Tan Sri Syed Mokhtar Al-Bukhary (reporters, 2016).

Besides, Tan Sri Syed Mokhtar also insisted to raise funds to finance project in order
to manage and reduce these massive debts. This is because finance project can give a
huge interest and benefit to company. Tan Sri Syed Mokhtar tries his best to find any
project and opportunity in order to reduce his massive debts because he knows that if
something happen to his company, it is not only affected the Malaysian economic and
created financial crisis but it is also affected employees who work in business under Al-
Bukhary Corporation. Moreover, Tan Sri Syed Mokhtar is wise in see opportunity in a
crisis. Many businessmen are changing their business in crude oil prices by sent the oil
and gas sector into prolonged tailspin, but Tan Sri Syed Mokhtar is not one to follow
the group. He is planning a foray into the industry O&G sector. This shows his

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seriousness when he has hired two former senior executives which are Tan Sri Shamsul
Azhar Abbas and Datuk Wee Yiaw Hin who are well-know names in the field (Barrock,
2016).

As a leader, Syed Mokhtar think deeply about his company and employee future
when he makes any decision. In addition, Syed Mokhtar Al-Bukhary facing all the
problems and issue calmly and try his best to make a good decision making. Instead of
panicking, he took a problem-solving approach that involved multiple steps and resulted
in a full-blown change management effort with his shareholders and share partner.
Furthermore, Tan Sri Syed Mokhtar take proactive measure and financial investment to
shows to his client and shareholder that he is capable of not only solving these massive
debts problems but also capable in earning their trust by responding quickly and
efficiently with a comprehensive step-by-step solving problem.

6.0 Conclusion

7.0 References

Barrock, J. (2016, November 15). Syed Mokhtar sets up new business vehicles. Retrieved
from Edge Weekly: http://www.theedgemarkets.com/article/syed-mokhtar-sets-
new-business-vehicles

Forbes. Syed Mokhtar Al-Bukhary. Retrieved from https://www.forbes.com/profile/syed-

mokhtar-albukhary/

Manaf, H. A. & Mohamed, A. M. (2014). Malay Business Leaders’ Characteristics and

Their Success in Business. Journal of Governance and Development. Vol. 10. Issue 1, pp.
109-135.

Michelle, A. (2014, April 12). Breaking News & Entertainment Portal. Retrieved from
Malaysian Review Website: https://news.malaysianreview.com/5281/albukhary-
international-university-shut-close/

Mohamed Khaidir. (Jun. 9. 2014). Al-Bukhary International University Shut Down Crisis.
Retrieved from

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https://www.slideshare.net/mohamedkhaidirmohamedzaraai/albukhary-
international-university-shut-down-crisis

Reporters, F. (2016, June 15). Syed Mokhtar's massive debts worry investors, say report.
Retrieved from FMT news :
http://www.freemalaysiatoday.com/category/nation/2016/06/15/syed-mokhtars-
massive-debts-worry-investors-says-report/

Sen, T. E. (2012, June 20). RM34.5b debts: Another crisis in the making? Retrieved from
FMT news: http://www.freemalaysiatoday.com/category/nation/2012/06/20/rm34-
5b-debts-another-crisis-in-the-making/

Wikipedia. Syed Mokhtar Al-Bukhary. Retrieved from

https://en.wikipedia.org/wiki/Syed_Mokhtar_Albukhary

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