After the announcement by the Deputy Finance Minister Datuk Chan Kong Choy in Parliament last Wednesday that EPF had introduced the “haram” and “halal” concept for stocks and shares and that EPF would not invest anymore in the gaming, tobacco and liquor stocks which would be disposed of when the share market improves, the EPF followed up with the announcement that the three advisors appointed with effect from 1st December 2001 are Federal Territory Mufti Datuk Haji Md Hashim Haji Yahya, Chief Justice of Syariah and Director-General of the Department of Syariah Judiciary Datuk Sheikh Ghazali Haji Abdul Rahman and Dean of the Centre for Post Graduate Studies, International Islamic University Malaysia Dr Mohd Daud Bakar.
The question that immediately arises is whether these appointments are proper and regular in having been made by the EPF Board after the adoption of a new investment policy to take into account the syariah law, and if so, why the Rukunegara principle underlining the multi-religious character of Malaysia had not been followed - or whether these appointments were made without the knowledge or approval of the EPF Board.
An important principle of EPF accountability and transparency is involved, that there should be no arbitrary change of the EPF investment policy, as introducing the “haram” and “halal”concept to stocks and shares without full consultation with the 10 million EPF contributors and the trade unions - as all trade unions leaders had been caught by surprise and are hearing for the first time the announcement that the EPF investments would be guided by the concept of “haram” and “halal” stocks.
The EPF Chairman, Tan Sri Halim Ali should explain why the 10 million EPF members and trade unions in the country were not consulted before this new investment policy was decided upon by the EPF.
Are all gaming, tobacco and liquor stocks “haram” which should not be the subject of EPF investments? Will those who regard tobacco and liquor stocks as “haram” also regard government revenue from these items, which total some RM1.8 billion this year, as “haram” and should be exempted altogether?
The EPF dividend of 6 per cent for last year is the lowest in 25 years since 1975, and EPF officials and government leaders have been preparing the country for an even lower EPF dividend for the coming years, reminding the EPF contributors that the law only guarantees a minimum of 2.5% dividend - and an even lower dividend than 6 per cent now seems quite a certainty with the national and global economy struggling in the recessionary aftermath of the September 11 terrorist attacks in New York and Washington.
Will the new EPF investment policy introducing the concept of “haram” and “halal” for stocks and shares be a good excuse for even lower EPF dividends in the coming years?
The EPF should be mindful of its statutory duty to ensure that the EPF contributions are invested to give the EPF contributors optimum returns, and in this regard, the 10 million EPF contributors are entitled to the right of choice as to whether they want their EPF savings to be invested in gaming, tobacco and liquor stocks or otherwise.
DAP will seek a meeting with the EPF Chairman, Halim Ali, to suggest that EPF must be sensitive to the unique characteristics of Malaysia’s plural society, respecting both the views of those who do not wish their EPF monies to be invested in gaming, tobacco and liquor stocks as well as those who want such investments to ensure high returns for their savings.
DAP will propose to the EPF Chairman and Board the introduction of two separate investment funds for equities to comply with the wishes of EPF members who do not want their savings to be invested in gaming, tobacco and liquor stocks as well as to respect the choice of EPF members who want the highest returns for their savings by investing in the “haram” stocks.
DAP will also propose the establishment of an Inter-Religious Council by the EPF, comprising not just Islamic syariah law experts but also experts from other great religions in the country, to advise it on the RM40 billion EPF investment portfolios in keeping with the Rukunegara principle of “Belief in God”