(Petaling Jaya, Friday): The executive director of the National Economic Action Council (NEAC), Tun Daim Zainuddin had told the foreign press recently that the "greatest challenge is to bring back the confidence of Malaysians first and then, the world economic community" in dealing with what he described as the "worst economic crisis" facing the country since the Second World War.
Daim should realise the urgency of an immediate counter strategy to avoid another battering of confidence arising from widespread impression that politically-connected companies are getting bail-outs despite solemn government promises of "no bail-outs" and "no corporate restructurings".
The five bail-outs of UEM, Sime Bank, KUB, Bank Bumiputra and Konsortium Perkapalan Bhd (KPB) have been mentioned as among the "new danger points" in "Asia’s battered economies….that could put at risk still-fragile investor confidence in the region".
What is even more distressing to Malaysians and the nine million Employees Provident Fund (EPF) contributors is the lack of responsibility, accountability and transparency of the EPF especially as it has been widely reported that the RM130 billion EPF funds would be raided to finance three of these five bail-outs.
I call on the NEAC to summon an emergency meeting to deal with this latest blow to confidence-restoration and to fully satisfy Malaysians as a whole as well as national and international investors that there has been no backtracking of government assurances of "no bail-outs" and "no corporate restructuring" at public expense in all these five cases.
The NEAC should direct the EPF to develop a culture of responsibility, accountability and transparency by giving full facts and figures to assure the nine million EPF contributors whether EPF funds would in anyway be involved in the bail-outs of UEM, Sime Bank and KUB, as well as establishing an example of good corporate governance by responding to the queries and concerns about the management and investment of EPF funds.
As has been rightly pointed out in market circles, questions abound about the Sime Bank Bhd by Rashid Hussein Bhd, especially on the funding aspect and the restructuring of the RHB group.
Although Amanah Merchant Bank had issued a statement on Wednesday on behalf of Sime Darby Bhd that RHB will be issuing shares for the purchase of Sime Bank, two major questions are:
Under the deal, RHB Holdings, a new company to be created for RHB Sakura Merchant Bankers, will issue to Sime Darby 40 million new shares at RM2.50 each, totalling RM100 million. On the other hand, KUB will be getting 268 million new shares valued at RM670 million for its 30.01 per cent.
Daim and NEAC should give urgent attention to the latest battering of confidence if the Government Economic Adviser is serious in his statement that the "greatest challenge is to bring back the confidence of Malaysians first and then, the world economic community" to put Malaysia back on the road to economic recovery.