The nine million EPF contributors have a right to know whether EPF had bought shares at prices higher than the open market price and their full details


Media Statement
by Lim Kit Siang

(Petaling Jaya, Friday): I am shocked by the reply of the Deputy Prime Minister and Finance Minister, Datuk Seri Anwar Ibrahim to my question in Parliament yesterday, asking for a list of "the shares bought by EPF since July 1997, giving date of purchase, purchase price per unit, total price, amount bought, and losses incurred at the end of the year and to state the changes of rules with regard to EPF investment in the stockmarket during the period, particularly with regard to Executive interference with EPF investment policy decisions".

I was not surprised by Anwar’s denial that there had been any change of rules with regard to EPF investment in the stockmarket during the financial crisis in the second half of last year, or that there had been any "executive interference with EPF investment policy decisions", although it was not convincing.

But I had never expected Anwar to refuse to list out the shares bought by EPF since the start of the financial crisis in July last year.

Anwar said EPF does not make a detailed report on the purchase and sale of shares in the KLSE, and explained: "This is to avoid the market being influenced by such reports since the Fund is involved in large-scale share transactions."

This is a totally unacceptable explanation as I do not see how a report in Parliament on EPF’s purchase of shares from July to December last year could influence the stockmarket. Anwar said any losses made by the EPF in its shares investments last year was only "on paper" - and if so, why is he so reluctant to reveal the "paper losses" suffered by EPF last year, whether it amounted to RM4 billion at the end of last year?

If Anwar’s claim is right, that EPF is involved in large-scale share transactions in the Kuala Lumpur stock market, and that throughout 1997 the EPF only bought shares based on fundamentals and long-term profit, then the effect of any such disclosure could only be positive - unless a revelation of the shares purchased by EPF would raise questions about the prudence and judgment of the EPF Investment Panel in taking such decisions.

The EPF refusal to give a list of the shares it had bought since the financial crisis and other full details like number of shares bought and price per unit have only raised questions in the minds of the nine million EPF contributors - "What is the EPF hiding". I call on Anwar to review the opaque and secretive EPF policy on equity investments which makes a total mockery of the government’s commitment to accountability, transparency and good corporate governance, which had been one of the central thrusts of his "third 1998 budget" in his Ministerial statement in Parliament on Tuesday. However, two days later, he had turned his back to the principles of accountability and transparency as far as disclosure on purchases of shares by EPF are concerned.

The reason why I had asked for "a list of the shares bought by EPF since July 1997, giving date of purchase, purchase price per unit, total price, amount bought, and losses incurred at the end of the year" is because I have received complaints that EPF had bought shares at prices higher than the open market price.

The nine million EPF contributors are entitled to know whether EPF had bought shares at prices higher than the open market price, and if so, the full details and reasons of all these transactions.

Anwar said EPF reports its purchase and sale of shares according to the requirements of the Companies Act, but in evading parliamentary accountability by giving the full details I have asked for, EPF is setting a bad example in corporate governance and accountability.

Have the five trade union representatives who are members of the EPF Board answers to the question on EPF investment which I had asked in Parliament, or are they as much in the dark as the nine million ordinary EPF contributors?

(27/3/98)


*Lim Kit Siang - Malaysian Parliamentary Opposition Leader, Democratic Action Party Secretary-General & Member of Parliament for Tanjong