The Sun reported yesterday that EPF, Kumpulan Wang Amanah Pencen (KWAP) and Pengurusan Danaharta Nasional Bhd are believed to have taken up the RM1.4 billion unsubscribed public portion of the Time dotCom Bhd initial public offering (IPO).
Time dotCom's initial stock sale of 571 million shares at RM3.30 each under its IPO was undersubscribed by 75% when applications closed on Feb 13. Only 142.86 million shares were subscribed.
Quoting an official "familiar with the listing exercise", the Sun said Time dotCom is believed to have submitted to the Registrar of Companies (ROC) the Form 29B, which contains details of the purchase of the two institutions and Danaharta.
The purchase by the three funds would allow Time dotCom to meet the listing requirement. Under the KLSE listing requirement, a company with more than RM100 million in paid-up capital is required to have at least 1,250 shareholders and not less than 25% of the shares must be held by the public.
Time dotCom made its debut on the Kuala Lumpur Stock Exchange yesterday with an 80 sen discount over its offer price of RM3.30.
I had said in a statement on 16th February 2001 that the Malaysian taxpayers are very concerned that the government would be embarking on a RM1.4 billion bailout as a result of the Time dotCom IPO undersubscription fiasco by using government-linked funds and agencies like EPF, SOCSO, Tabung Haji to take up the IPO shortfall.
I had said a month ago that market analysts were fairly unanimous in the view that the share price of Time dotCom would nosedive at its public debut below the IPO price of RM3.30, with some valuing Time dotCom at RM1.50 to RM2.30 a share, although there were those who expected the share to be eventually valued at below RM1.50.
I stresseed that in the circumstances, it was clearly not in the public interest for government-linked funds and agencies to be tapped to mount another bail-out operation to buy up the undersubscribed IPO portion at RM3.30 per share.
I had warned that after the RM1.79 billion government bailout of Tan Sri Tajudin Ramli's 29.09 per cent of MAS stake through Naluri and the RM6 billion bailout for the two LRT companies, STAR and PUTRA, another billion-ringgit bailout for Halim Saad's Time dotCom IPO will be the last straw to break the camel's back.
It is a betrayal of public trust for the EPF to use the savings of 9.7 million EPF contributors to participate in bailing out the RM1.4 billion Time dotCom IPO undersubscription shortfall when the stock could be bought from the market at two thirds its price.
At 11.30 a.m. this morning, the Time dotCom counter was down to RM2.31 per share on the stock exchange, a 30 per cent discount over its offer price of RM3.30. This would mean that if the Sun report is correct that EPF, KWAP and Danaharta had taken up the RM1.4 billion unsubscribed public portion of the Time dotCom IPO shortfall, these three institutions would have suffered a loss of RM420 million in the past two days, which is a criminal breach of trust and a criminal misapplication of public funds.
When EPF made the disastrous announcement of a 6 per cent dividend last month, DAP MP for Cheras Tan Kok Wai had immediately phoned up the EPF for a meeting between the EPF Chairman Tan Sri Abdul Halim Ali and DAP leaders for a full explanation as to why the 6% EPF dividend last year was lowest, not only in the past 25 years, but in the past four years when the GDP growth was the highest last year (with Daim recently forecasting 8.5% growth) since the Asian financial crisis in 1997. With lower GDP growth, EPF could still declare a dividend of 6.74% in 1997 and 1998 and 6.84% in 1999. What went wrong last year?
However, the EPF had been avoiding fixing an appointment. This morning,
my secretary had again phoned up EPF to ask for a meeting with the
EPF Chairman in connection with the public outrage at the EPF using EPF
monies to bail out the Time dotCom IPO public subscription shortfall with
the counter crashing by 30 per cent of its public offer price, and
the EPF
again indulged in its habitual stonewalling tactics.
If the EPF chairman continues to stonewall a meeting with DAP leaders to avoid living up to the principles of public accountability and transparency in managing RM180 billion EPF funds, I will lodge a police report against the EPF for criminal breach of trust and criminal misuse of public funds tomorrow based on yesterday's Sun report.
The 9.7 million EPF contributors want an immediate public accounting from the EPF as to whether EPF had suffered the bulk of the RM420 million losses in the last two days as a result fo taking up the RM1.4 billion unsubscribed public portion of Time dotCom, the actual amount invested by EPF in the Time dotCom and the actual losses suffered as a result of the 30 per discount over its public offer price in the last two days, the reasons for the EPF decision as well as why the EPF has declared the lowest dividend in 25 years for last year.
(13/3/2001)