(Petaling Jaya, Saturday): I am very surprised by the reaction to my call to two top MTUC leaders who are members of the EPF Board, namely MTUC President Zainal Rampak and CUEPACS Secretary-General N. Siva Subramaniam that they should block the proposed Employees’ Provident Fund (EPF) bail-out of United Engineers Malaysia (UEM) through a RM1.5 billion acquisition of a reported 20% stake in Projeik Lebuh-raya Utara-Selatan Bhd (PLUS).
I had made this call to the two top trade union leaders in the country as the MTUC, through its Secretary-General G. Rajasekaran has rightly concluded and declared that the EPF-PLUS deal was a rescue plan for UEM Bhd, which wholly owns PLUS.
UEM had initially financed the highly-controversial RM2.34 billion acquisition of 723 million Renong shares or 32.6 per cent stake in Renong with borrowings and is seeking to raise funds by selling its equity in PLUS for RM1.5 billion. The cash from the sale would reduce UEM’s gearing to 2.5 to three times debt-to-equity from four to five times.
I had also reminded Zainal and Siva Subramaniam, as well as other trade union leaders serving on the EPF Board, that they should safeguard the interests of the nine million EPF contributors and to demand a full and satisfactory public explanation on controversial investment decisions of the EPF, which seems to subordinate the interests of EPF contributors to other considerations, like the bail-out of troubled companies.
The Sun reported that union representatives on the EPF Board claimed their hands are tied where EPF’s investments are concerned. MTUC secretary-general G. Rajasekaran was quoted as saying that this is because the agency’s investments are handled by a special committee set up for the purpose,.
"The committee is separate and distinct from the board. Board members are only given a general report on the status of investments undertaken on a regular basis by the committee."
There are five trade union leaders serving as members of the EPF Board. Are they only "rubber stamps" who can only draw allowances but have no right to protect and promote the rights and interests of the nine million EPF contributors, and if this is the case, what is the use of having trade union representation on the EPF Board?
Have the trade union representatives on the EPF Board made it very clear at the EPF Board meeting the opposition of the MTUC to any plan by the Employees’ Provident Fund to buy a stake in a highway toll concessionaire PLUS on two grounds:
I cannot accept the excuse that the trade union representatives on the EPF Board cannot block the EPF acquisition of PLUS shares as their "hands are tied". The trade union representatives must first explain what they have done to get the EPF Board to listen and respect the wishes of the nine million EPF contributors on this issue.
The five trade union representatives on the EPF Board should requisition a formal meeting of the EPF Board to demand that the views of the nine million EPF contributors should be heard before a final decision is taken to use EPF funds to bailout UEM through acquisition of a RM1.5 billion stake in PLUS.
It is true that under the Employees Provident Fund Act 1991, the seven-member EPF Investment Panel does not provide for any trade union representative, and the DAP had strongly objected to this omission in Parliament when the Bill was debated in Parliament on 12th February, 1991.
However, the EPF Investment Panel is not an independent body but is answerable to the EPF Board. 18(2) of the EPF Act provides: "The Investment Panel shall be subject to such directions issued by the Board and approved by the Minister, from time to time."
The then Deputy Finance Minister, Datuk Abdul Ghani bin Othman used this clause to assure DAP MPs that the workers’ interests would be protected as the Investment Panel is finally answerable to the EPF Board.
Furthermore, Parliament was assured that the workers’ representatives on the EPF Board could play a check on the Investment Panel. Thus, during the winding-up of the debate on the EPF Bill on 13th February, Abdul Ghani Othman said:
"Tuan Yang di Pertua, selain daripada apa yang telah saya jawab tadi, saya sekadar menambah bahawa Panel ini adalah tertakluk kepada dasar, dan arahan yang dibuat oleh pihak Lembaga akan di dalam Lembaga tersebut terkandung di dalamnya walkil-wakil daripada pekerja. Jadi sewajarnyalah wakil-wakil daripada pihak pekerja dapat mengawasi apa jua langkah-langkah yang dilaksanakan oleh pihak Panel Pelaburan. Jadi di sini kepentingan pekerja masih lagi terpelihara melalui perwakilan pekerja secara tripartite dan sambil itu pula kita juga sewajarnyalah meletakkan kepercayaan kepada mereka yang sengaja dipilih berdasarkan kepada keupayaan mereka dan juga, dengan izin, integrity mereka yang menganggotai Panel Pelaburan ini."
During the committee stage, again in response to the DAP’s criticism for the lack of worker representation on the Investment Panel, Ghani said:
"Saya ingin menambah disini, Tuan Pengerusi, bahawa kepentingan pekerja terpelihara walaupun wakil pekerja secara khusus tidak ada dalam Panel Pelaburan, kerana akhirnya Panel Pelaburan terpaksa merujuk kepada Lembaga KWSP dan juga kepada Menteri Kewangan. Ini ada diuntukkan dalam Fasal 18(2)."
The question now is whether the trade union leaders on the EPF Board had played their role to "mengawasi apa jua langkah-langkah yang dilaksanakan oleh pihak Panel Pelaburan", whether in regard with the EPF investment decisions since the second half of last year, or in particular reference to the proposed EPF bailout of UEM through acquiring a substantial stake in PLUS.
Apparently, the trade union leaders on the EPF Board have not fully played their role to promote and advance the interests of the workers, and in particular the nine million EPF contributors or they would not be talking about "their hands are tied", even before explaining what they have done within their powers on the EPF Board in keeping a check on the EPF Investment Panel.
It is not only the EPF Board and the EPF Investment Panel who must give a proper accounting of how they have best protected and advanced the provident fund, but the trade union leaders as well, who should account for the roles on the EPF Board - as these are positions of trust for they were appointed not to represent themselves but the workers.