KUALA LUMPUR: Malaysian companies grappling with financial problems often face tax-related issues, said business turnaround specialist and Vad Capital Sdn Bhd managing director Vivek Sasheendran.
“Usually, when we are called in, there is already a situation. Companies are either losing revenue, experiencing losses or facing significant problems. We have banks coming in, creditors coming in and debtors that need to be paid. So typically, many of the key areas we are called in to address start with tax ... which should be addressed promptly,“ he told SunBiz.
His advice – when going through a crisis, it is always best to face the problems rather than run away from them.
“A lot of times, we see problems because the people in charge avoid the problems. You owe people money, you don’t meet them. You run away from them, and that makes the problem worse. When you have legal suits coming your way, then everybody’s eyes are on you.
“So that is what I see a lot. When there is a problem, people just shut off. Especially the directors. They just shut off, they just focus on what came first. They let it go, and then the problem becomes too big to handle,“ Vivek said.
He said that in legal processes, everything is time-bound, and companies need to act fast or there will be a significant cost to be paid.
“When you receive letters from lawyers, you cannot ignore them, otherwise you may get things like judgement in default. Undoing these things is very costly and disrupts what we are supposed to do for the company.
“That’s why we always advise them to do a perimeter check because you don’t want to be in that situation. A perimeter check will be much cheaper than engaging in full-blown legal proceedings,“ said Vivek.
He added that these businesses should conduct regular health checks on their financial status as there have been a lot of changes that have happened in the last few years.
“Our advice is always to do a perimeter check. When there is a slight dip or when there is no problem, consider calling people like us to do a health check on the company. We will go in, look at your finances, address all your legal problems, sit down with your heads of departments, identify the issues, and move forward,“ he said.
Additionally, Vivek mentioned an increasing number of businesses seeking assistance in cybersecurity that reflects a broader trend in businesses.
“The latest stretch that we also had is on the IT side of things. Which is why recently we have made an investment in a cybersecurity company. That is something additional,“ he disclosed.
