The recent assurance by the Employees Provident Fund (EPF) Chairman
Tan Sri Abdul Halim Ali that “Every sen in EPF is safe” is
meaningless as he had not been able to give a full and satisfactory explanation
on many EPF investments, as for instance:
EPF's asset and investment allocation for loans and debentures at the height of the financial crisis in 1997 reached RM33.83 billion or 26.16 per cent of total EPF funds in 1997, RM38.43 billion or 26.58 per cent in 1998, RM39.87 billion or 24.61 per cent in 1999 and RM37.62 billion or 20.77 per cent in 2000 when a decade ago loans only constituted 8.2% of total allocation of EPF funds.
Are these EPF loans safe or will they end up like the RM500 million EPF loan to Time Telecommunications Holdings in 1996, forcing EPF to participate in the Time dotCom IPO bailout at terms detrimental to the interests of the EPF contributors?
The 9.7 million EPF contributors are entitled to a full and satisfactory explanation for the close to RM40 billion EPF funds allocated for loans and debentures in view of the fact that the government has failed to learn any lesson from the 1997 financial crisis.
As University of Malaya associate professor Dr. Edmund Terence Gomez said at the DAP “Bailouts and buyouts - are EPF, Pensions Trust Fund and Public Monies Safe” held in Kuala Lumpur last Monday, financial institutions that are controlled by the government are being used to channel loans to a privileged few who are facing problems in servicing their debts.
According to him, 15 corporate groups accounted for 20 percent of Malaysia's entire bank loans during the economic crisis.
He said: "Of the RM39 billion loaned by banks for share acquisition, almost 45 percent were given to the individuals. One company, the Umno-linked Renong, had accumulated debts constituting more than five percent of loans in the Malaysian banking system."
EPF should report to Parliament all the loans given out to the Renong-associated stable of companies before and after the 1997 financial crisis.