Unfortunately, the country is often bombarded with outrageous examples of corporate misgovernance, whether 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 - and the latest outrage is the use of government-linked funds and agencies to bailout the RM1.145 billion Time dotCom initial public offering (IPO) 75% undersubscription shortfall.
It is most unfortunate that the Employees Provident Fund (EPF), which
manages a fund of the size of RM181 billion and according to EPF Chairman,
Tan Sri Abdul Halim Ali, "one of the largest in the world", is in
the forefront as an example of bad corporate governance as illustrated
by his refusal to comply with the most elementary rules of accountability
transparency to give information on EPF's involvement in the RM1.415 billion bailout for Time dotCom IPO shortfall.
Yesterday, I had lodged a police report in Kuala Lumpur based on the
The Sun report on Monday that EPF, Kumpulan Wang Amanah Pencen (KWAP) and
Pengurusan Danaharta Nasional Bhd were believed to have taken up
the RM1.415 billion
unsubscribed public portion of the Time dotCom Bhd IPO - which would mean that these three agencies would have suffered an astronomical loss of RM439 million in the first two days of the public debut of Time dotCom as a result of the 31 per cent crash of its IPO price.
The use of public funds to bail out the Time dotCom 75% IPO shortfall paying the IPO price of RM3.30 when the market had been quite unanimous in expecting a sharp plunge of its price on its public listing - losing to the tune of RM439 million as a result of a 31 per cent price crash in two days - tantamounts to criminal breach of trust and criminal misapplication of public funds.
If EPF had participated in the bailout of the Time dotCom IPO, then the EPF would be doing its worst for the 9.7 million EPF contributors instead of "EPF doing its best for contributors" which was the heading of a letter from the EPF Chairman, Tan Sri Abdul Halim Ali which was published in the Sun on Monday claiming that the EPF's "decision to invest in any project, company or fund, has always been based on the criteria of security, liquidity and yield".
Halim would have to explain how from the three considerations of "security, liquidity and yield", EPF can justify taking up the unsubscribed public portion of Time dotCom IPO, when EPF can now buy the Time dotCom shares in the market at 31 per cent discount of the IPO price?
If EPF had not participated in the bailout by government-linked funds and agencies of the RM1.415 billion Time dotCom IPO as not to partake in the staggering losses of RM439 million in two days of its public listing, why can't Halim declare so publicly?
Halim should be aware that he and other EPF officers and employees are servants of the 9.7 million EPF contributors and trustees of the RM181 billion EPF monies and not lords and masters of this hoard of money as some EPF staff seemed to assume in their rude and crude treatment of EPF contributors who went to the EPF Headquarters in Kuala Lumpur yesterday to demand accountability about the safety and quality of their EPF funds.
The principle must be established clearly and without a shadow of doubt that the EPF Board and management must practise not only good corporate governance but must adhere to the principles of accountability and transparency in their relations with the 9.7 million EPF contributors.
To establish this principle, DAP and the Barisan Alternative will lead the 9.7 million EPF contributors to appear before the over 50 EPF offices in the country to demand accountability on EPF's role in the RM439 million losses over the bailout of Time dotCom IPO shortfall and the lowest EPF dividend of 6 per cent last year in 25 years.
Business Times today in a report "KWAP, Danaharta buy 14pc of Time dotCom for RM1.2b", states:
"STATE-RUN pension fund Kumpulan Wang Amanah Pencen (KWAP) and Pengurusan Danaharta Nasional Bhd have spent a total of RM1.17 billion to purchase unsubscribed shares of Time dotCom Bhd, following the public's dismal reception to the company's initial public offering last month.Many questions of burning public interests cry out for answer from this report, including:
"The two government agencies said in a statement to the Kuala Lumpur Stock Exchange that they purchased the shares at an issue price of RM3.30 a piece under a sub-underwriting arrangement.
"KWAP is now a substantial shareholder of Time dotCom, holding some 273.86 million shares or 10.82 per cent of the integrated telecommunications company.
"Danaharta, the agency tasked to remove bad loans from the banking system, also has a direct interest of 80.05 million shares that translates into a stake of 3.16 per cent.
"Shares of Time dotCom fell a third day to RM2.27 yesterday.
"This means that KWAP and Danaharta are sitting on a paper loss of slightly over 31 per cent.
"Their combined interests are now valued at about RM803 million based on yesterday's closing price.
"Apart from the two agencies, the Government's investment arm Khazanah Nasional Bhd had also acquired 30 per cent of Time dotCom for some RM2.1 billion prior to its listing on Monday."