DAP supports MTUC proposal that the Chairman of the EPF should not be allowed to hold the post of the fundís chief executive officer as it will lead to a conflict of interest


Media Statement
by Lim Kit Siang  

(Petaling Jaya, Monday): DAP supports the Malaysian Trades Union Council (MTUC) proposal that the Chairman of the Employees Provident Fund (EPF) should not be allowed to hold the post of the fundís chief executive officer as it will lead to a conflict of interest.

I agree with what the MTUC President, Zainal Rampak said yesterday that the EPF Chairman should act like an arbitrator, balancing the competing interests of the various sectors represented on the Board always bearing in mind that the highest interests of the nine million EPF contributors must be the governing consideration of the EPF Board.  This will be difficult if the chairman is also the CEO, who is supposed to report everything to the Board, which is not done!

In fact, this anomalous situation where the Chairman of the EPF Board is also the fundís CEO has made it impossible for the EPF Board to carry out its statutory duties, as at present the EPF Investment Panel is completely independent and not answerable to the Board.

This was why EPF Board members from trade unions complain that the EPF Investment Panel never give a report of the shares and loans given out by the EPF Investment Panel, which are not chicken-feed, as last year, EPF invested RM25 billion in the stock market and gave out RM33 billion in loans.

When enacting  the EPF Act 1991, Parliament never intended to establish an EPF Investment Panel which is completely independent and not answerable to the EPF Board.

This is why Section 18(2) of the EPF Board clearly stipulates: "The Investment Panel shall be subject to such directions issued by the Board and approved by the Minister, from time to time."

But how can the EPF Board insist on  its statutory powers over  the EPF Investment Panel and demand a full and regular report on its shares dealings and loans disbursements, when the Chairman of the EPF Investment Panel is also the Executive Chairman of the EPF Board?

In fact, it is this anomalous situation which has made the EPF Executive  Chairman,  Tan Sri Mohamad Sallehuddin develop an attitude that he is answerable to no one but to the Prime Minister  and the Finance Minister, when his first and last duty is to the nine million EPF contributors.

It is such an attitude which has caused the EPF Executive Chairman to dismiss with contempt  the demands of the nine million EPF contributors that the EPF be subject to regular public scrutiny and audit to give meaning to the principles of accountability and transparency.

An  EPF Executive  Chairman mindful of his duties to the nine million EPF contributors, for instance,  would not have acted so high-handedly in refusing even to acknowledge my request way back in January for a meeting with DAP MPs to discuss the EPFís investment policies and decisions, whether in shares or loans.

The nine million EPF contributors must demand that they want an EPF Executive Chairman who will meet and talk to them to find out about their concerns and their worries, as for instance, how the EPF can help the contributors tide through the worst economic crisis faced by the people in the nationís history.

For instance, at the DAP Forum "Nationaol Economic Recovery Plan (NERP) - 13 months of worst economic crisis" in Kuala Lumpur last Thursday, I had called on the  EPF to to  allow the EPF members to withdraw up to 10 per cent of their savings in the EPF to help them to face the hardships in the present protracted economic crisis.  Instead of using EPF monies to bail out troubled companies with political connections, EPF members must have first priority to be able to depend on their EPF savings to help them out of their financial and economic problems in the economic crisis.

What is the EPFís response to this proposal? Is the EPF Executive Chairman prepared to seek the views of the nine million EPF members on this and other proposals, or is he only looking after the governmentís interests when these are at variance with the interests of the nine million EPF members?

(10/8/98)


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