Selling Certificates - The UK diploma mill in Malaysia

Murray Hunter

Selling Certificates - The UK diploma mill in Malaysia

APR 10, 2024





The Chartered Management Institute (CMI) is a UK charity promoting management training. Its wholly-owned subsidiary in the UK is engaged in “selling student registrations on commercial terms”, according to its 2023 Annual Report.

In 2019 CMI established a wholly-owned commercial entity in Malaysia to do the same thing in Malaysia.

The commercial student registrations are advertised and sold with "value-added" deliverables which are part of HE Partnership agreements with universities in Malaysia packaged with CMI certificates and credentials.

These "value-added" offers claim to provide unique course material and curriculum content, career development tools and advice, job preparedness and CV advice, internships, mentoring, student events and networking, interview training, counselling and other support activities.
In reality these "value-added" deliverables have not been provided as recently released feedback from Malaysian universities has revealed.

CMI has HE Partnership Agreements with 21 universities and colleges including leading private universities such as Sunway University, Taylors University and UNITEN owned by the national power company.

Public universities including Putra Business School, Universiti Utara Malaysia and Universiti Malaysia Kelantan are also involved.

This covers around 4,000 students, each paying around RM1,500 for membership and "value-added" services and products which have not materialised.

In addition there are around 1,000 members who are not students but pay a similar annual fee of RM1,500 for similar packages which have not been delivered.

Collectively these 5,000 members should raise around RM6 million in revenue to provide the "value-added" deliverables promised by CMI and paid for largely by students and universities but this has not happened.

During the period 2019-23 the commercial arm of CMI in Malaysia recorded no revenue at all from the fees of 5,000 members but had instead accumulated a RM4.14 million (almost US$1 million) debt from operational expenditure, mainly staff salaries.

This huge liability was owed to CMI in the UK and was written-off as a bad debt in August 2023 according to audited accounts filed at the Malaysian Companies Commission (SSM).

This left the CMI commercial arm in Malaysia with no assets, no income and a RM2 million loss recorded in its audited 2023 return at SSM.

The Malaysian commercial arm of CMI has essentially been run as a tax avoidance shell company with just one share issued, valued at RM1 and held by CMI in the UK. It has only two directors one of whom is Lucy Greggains the CFO

and COO of CMI in UK and one local director otherwise apparently unconnected with CMI.

The tax avoidance model ensures that all fees and income from 5,000 Malaysian members and 21 universities is paid to the UK where it is exempt of tax due to CMI's charity status.

Money from Malaysian fee-payers and universities is then recycled back to the CMI commercial entity in Malaysia to pay the skeleton staff there who are involved in the commercial recruitment of students and selling CMI certificates in what is essentially a diploma mill.

This business is managed from the UK by Zain Munir, Head of International at CMI in England.

The money recycled back to Malaysia is registered as a loan to the Malaysian commercial arm rather than revenue and when running costs are netted out the Malaysian entity registers a financial loss every year so that no tax is paid in Malaysia either.

In the period 2019-23 CMI has paid no tax on at least US$1 million of recycled income registered as a loan rather than as revenue. The loan is then written off to provide clean accounts.

The CMI UK accounts state that they make a profit from the fees paid by Malaysian students and universities. The amount is undeclared in the UK audited accounts but is absorbed into the UK income where no tax is paid due charitable tax exemption status.


A scamming business model

The business model of the commercial recruitment of students and selling of certificates works as follows.

Universities recruit students and teach them for 2-4 years according to their own curriculum with content developed and delivered by their own faculty.

Pastoral support, career advice, job preparation, internships, student events and networking, interview training and all other support is provided by the universities themselves.

The students complete the required university assessments and exams which are graded by the university faculty. On completion of their programme the students receive the degree from the university accredited by the Malaysian Qualifications Agency (MQA).

At that stage upon payment of a fee CMI issues a UK certificate without any assessment, teaching, use of CMI course materials or contact with CMI tutors or staff members.

In many cases students are unaware that they have paid for the CMI certificate because the fees have already been charged and collected on behalf of CMI by their universities, sometimes without any separate itemised record in their bills.

CMI also follow a policy of compulsory enrollment and charges for all students following a programme for which a certificate will be sold. There is no "opt-out" option.

Such scams must be eliminated from Malaysian higher education to maintain integrity.