The new EPF policy was revealed by the MCA Deputy Finance Minister, Datuk Chan Kong Choy in Parliament on Wednesday when replying to a question by the PAS Youth leader and MP for Pokok Sena, Mahfuz Omar who questioned how EPF’s investments in British American Tobacco, Genting, Resorts World and Guiness Anchor could be reconciled with the government’s claim that Malaysia is an Islamic state.
Instead of telling Mahfuz, Parliament and Malaysians that the declaration by the Prime Minister, Datuk Seri Dr. Mahathir Mohamad that Malaysia is an Islamic state would not affect the status quo in the country - as repeatedly assured by UMNO, MCA and Gerakan Ministers - and that there would therefore by no change in EPF policy in investments in equities, Chan announced a new EPF policy to introduce the “haram” and “halal” concept to stocks and shares and to discontinue EPF investments in companies dealing in gaming, tobacco and liquor, and that the present investments in such companies would be disposed of when the share market improves.
Chan also told Parliament that the EPF board has appointed consultants well-versed in syariah (Islamic) laws as advisers on the fund’s investment portfolios.
The number of EPF contributors passed the 10 million mark this year, and the EPF contributors are entitled to be fully informed and consulted before a new EPF policy is instituted concerning the investment of their EPF monies, which now total some RM200 billion, as in introducing the new concept of distinguishing stocks into “halal” and “haram” categories.
As at the end of last year, EPF’s accumulated investments of RM181.51 billion was allocated as follows: RM61.765 billion (34.03 per cent) in Government Securities, RM36.073 billion (19.87 per cent) in loans and corporate bonds, RM39.464 billion (21.74 per cent) in equities, RM42.997 billion (23.69 per cent) in the currency market and RM1.211 billion (0.67 per cent) in properties.
I believe that the EPF could have invested from 10 to 20 per cent of its equities in the so-called “haram” stocks, which would mean investments ranging from RM4 to RM8 billion.
The Ministerial statement on the new EPF policy should state the total and percentage of the RM40 billion investment in equities which are in the so-called “haram” stocks of gaming, tobacco and liquor, listing all the stocks involved and the respective amounts of EPF sums invested in each.
Parliament and the 10 million EPF contributors should be informed as to when this new policy to introduce the “haram” and “halal” concept to equities was adopted, and whether it was approved by the EPF Board or only by the EPF Investment Panel without the knowledge or consent of the EPF Board and the workers’ representatives on the EPF Board, such as the MTUC president Senator Zainal Rampak, the Congress of Unions of Employees in the Public and Civil Services president N. Sivasubramaniam and the Sarawak Bank Employees Union general-secretary Andrew Lo Kian Nyan.
Was this new EPF policy adopted after the Prime Minister’s announcement at the Gerakan delegates conference on Sept. 29, 2001 so that Chan Kong Choy could answer in Parliament to the PAS query as to how EPF investments in “haram” stocks like the gaming, tobacco and liquor counters could be reconciled to the government’s claim that Malaysia is an Islamic state?
The new EPF policy dividing the stocks and shares into “halal” and “haram” and dropping investments in gaming, tobacco and liquor counters are a serious breach of the repeated Ministerial assurances that the declaration that Malaysia is an Islamic state would not affect the status quo in the country and the new EPF policy should be reviewed by the Cabinet.
Is the EPF prepared to allow the ten million EPF contributors the option to choose whether they want their EPF monies to be invested in the so-called “haram” stocks?
Is the EPF Board prepared to consider one proposal made on the Internet to separate the Muslim and non-Muslim EPF contributions for the purpose of investing in the so-called “haram” stocks, as the EPF contributors are entitled to want the best returns for their EPF monies, and dividends generated from the two different investment funds could be credited accordingly.
The Ministerial statement in Parliament should clarify whether EPF had sold off 577,000 shares in British Tobacco (M) Bhd (BAT) after September 29 simply because of the Prime Minister’s declaration that Malaysia is an Islamic State? However, this still leaves EPF with 18.3 million shares or a 6.4 per cent interest in BAT.
The Ministerial statement should also give two further particulars, a full list of the “haram stocks” and the total EPF investments in each of them, whether Genting, Resorts World, Tanjong, Berjaya Sports Toto, Bhd, Magnum Bhd or Guiness Anchor and the identity of the “consultants well-versed in syariah laws” appointed to advise on EPF investment portfolios, its remuneration and terms of reference.