EPF should immediate practise a new policy of transparency and  confirm whether it is true that EPF had bought some 3.4 million shares in Maybank costing some RM43 million in the 12 days between May 9 to 27 incurring a loss of some RM7 million

Media Conference Statement
by Lim Kit Siang

(Penang, Thursday): Yesterday, I had asked the Employees Provident Fund (EPF) to clarify whether the RM181 billion EPF funds  had been involved in the final-minutes  multi-million ringgit institutional manipulation of the Kuala Lumpur stock exchange (KLSE)   through the Big Three “TMT” stocks - Telekom Malaysia Bhd, Malayan Banking Bhd and Tenaga Nasional Bhd - in the past three months

The 9.7 million EPF contributors are very concerned about the safety and quality of their RM181 billion EPF funds, especially with the catalogue of disastrous EPF investments, like the Time dotCom IPO fiasco.

Time dotCom plunged to  RM1.96 per share when trading closed yesterday, which is RM1.34 or 40.6  per cent below its IPO price of RM3.30.  This would  mean that EPF has suffered a loss of RM110 million because of its RM269.28 million investment in Time dotCom IPO bailout operation.

It is no comfort to the 9.7 million EPF contributors that the losses suffered by EPF is much less than  the Pensions Trust Fund (KWAP), which had taken up 273.86 million shares of the unsubscribed portion of Time dotCom IPO for  the total sum of RM903.74 million, suffering the astronomical loss of  RM366.92 million,  for a RM110 million EPF loss is an unacceptable and intolerable loss to the EPF contributors especially when there can be no good reason for EPF monies to be invested in the Time dotCom IPO fiasco.

When DAP leaders and MPs met the EPF Chairman, Tan Sri Abdul Halim Ali last month, we pressed for a new EPF policy of accountability and transparency as the existing policy dependent on the EPF annual report and quarterly EPF announcements of its performance indicators, which highlight the investment types, the amounts and asset allocation, is too opaque and completely unsatisfactory.

The EPF contributors are entitled to know the full details of the shares bought and sold using EPF monies, so that they would be in a position to judge whether there had been prudent investment or otherwise and there should be regular public release of such information by the EPF.

EPF should immediately practise a new policy of transparency and  confirm whether it is true that EPF had bought some 3.4 million shares in Maybank costing some RM43 million in the 12 days between March 9 to 27, 2001  incurring a loss of some RM7 million when Maybank fell to RM10.80 per share at the end of  the “bloodbath” at the stock exchange yesterday.
The KLSE was the worst-hit Asian stock market yesterday, its composite index plunging  a whopping 6.14% or down 38.91 points  to end at a two-year low and below the psychological 600-level of  594.26.

It has been argued that as the three TMT stocks of Tenaga, Maybank and Telekom bear such a heavy weightage in the KLSE Composite Index (KLCI) - the three collectively account for about RM110 billion or 35% of the total capitalisation of the index’s 100 component stocks - timely buying support is necessary to prevent the benchmark from sinking over 100 points.

Two questions are pertinent however: firstly, whether this could justify commission of crimes of market churning and  manipulation which are offences under the  Securities Act and secondly, whether it is the role of the EPF funds meant to provide old age savings for the 9.7 million EPF contributors to prop up the stock market even if it means suffering colossal losses.

In view of the  widespread and deep-seated nation-wide concerns over the safety of EPF, Pensions Trust Fund and other public monies in the expanding list  of government bail-outs and buy-outs, whether Time dotCom, MAS, Putra, Star, Indah Water Konsortium, UEM or Renong, DAP will organise a series of public forums in the country "Buyouts and bailouts - Are EPF, Pensions Trust Fund and public monies safe?".

The forum series will start in Kuala Lumpur on Monday (9th April 2001 at 8 pm)  at the Federal Hotel, Kuala Lumpur, to be followed by one in Penang on Saturday, 14th April 2001, Perak, Selangor, Negri Sembilan, Malacca, Johore, Sarawak and Sabah.

The forum series will also be the launching pad for the  establishment of the EPF Contributors’ Association to protect the rights and interests of the 9.7 million EPF contributors and their  EPF funds which should reach RM200 billion by the end of the year by providing an avenue to channel the grievances of the EPF  contributors to the EPF Board like the lowest dividend of six per cent in 25 years declared for last year.

It is hoped that the protem committee for the  EPF Contributors’ Association could be announced at the Kuala Lumpur forum on Monday.


*Lim Kit Siang - DAP National Chairman