(Petaling Jaya, Friday): At a time when the Employees Provident Fund (EPF) has announced the lowest dividend in two decades at 6.7 per cent for last year, the nine million EPF contributors are rightly concerned about reports that the RM130 billion EPF funds would again to summoned to perform "national service" to bail out Sime Bank to replenish its shareholders funds, which were slashed to RM368 million from RM2.4 billion as a result of provisions totalling RM1.8 billion to cover bad and doubtful assets in its domestic and regional operations.
It has been reported that Rashid Hussain Bhd. (RHB) has obtained approval from Bank Negara to proceed with negotiations for the acquisition of Sime Bank Bhd. for the purpose of a merger with RHB Bhd., and that RHB will issue new shares -- amounting to 20 per cent of its enlarged share capital -- to the Employees Provident Fund in exchange for cash to finance the acquisition of Sime Bank.
Can the EPF Executive Chairman, Tan Sri Sallehuddin Mohamed confirm that EPF money would be used to bail out Sime Bank? Would the nine million EPF contributors be given a chance to be consulted or their views sought before EPF funds are committed in another "national service" to bail out Sime Bank?
The Prime Minister, Datuk Seri Dr. Mahathir Mohamad said yesterday that the low dividend of 6.7 per cent declared by the Employees Provident Fund for 1997 was "caused by foreign speculative pressure on the regional currencies and stock markets".
I do not think this explanation is acceptable especially as EPF’s 6.7 per cent dividend is even lower than in the eighties when the country was in the deepest recession, when there was negative GDP growth of -1.0 per cent in 1985, 1.2 per cent in 1986 and 5.3 per cent in 1987 as compared to the government’s forecast of 8 per cent growth for 1997. From 1983 to 1987, which was the year of the Great Stockmarket Crash, EPF’s dividend was consistently 8.5 per cent.
I call on the EPF Executive Chairman Tan Sri Sallehuddin Mohamed and the EPF Board to go on a nationwide roadshow to explain to the nine million EPF contributors the full reasons for the lowest dividend in two decades and the EPF investment policy, as well as to submit fully to the principles of accountability, transparency and responsibility to the EPF contributors.