Call on EPF Chairman Halim Ali to lead the EPF Board on a nation-wide roadshow to resolve EPF crisis of confidence of 10 million EPF members to explain why EPF is paying 5% dividend-lowest in 37 years since 1963

(Penang,  Wednesday): The Employees Provident Fund (EPF) Chairman, Tan Sri Abdul Halim Ali, should lead the EPF Board on a nation-wide roadshow to explain to the 10.07 million  EPF contributors why EPF is paying 5% dividend -  the lowest in 37 years since 1963 - in keeping with  the principles of accountability, transparency and responsibility.  

The EPF should convene a general meeting of EPF contributors in every state in the country to explain the reasons for the lowest EPF dividend in 37 years,  its investment policy and decisions,  where EPF Board members and officials can allay the concerns of the EPF contributors about the safety, liquidity and yield of EPF funds.  

In an era where even  the government talks about good corporate governance, the EPF Board should concede to the demand and rights of the 10.07 million EPF contributors for greater accountability, transparency and scrutiny of the EPF and EPF Board members to ensure that there is no imprudent, injudicious or illegal investment of the RM186.95  billion EPF monies and in particular  that EPF monies are not used to bail-out troubled  crony or ex-crony companies.  

The lowest EPF dividend of 5% in 37 years has precipitated a new  crisis of confidence in the EPF and the EPF Board must seriously address the EPF contributors’ worries   about the safety and quality of their provident fund by the adoption of a new EPF policy of accountability, transparency and good corporate governance. 

The EPF has a history of dubious transactions where the EPF funds were  used as a ready cash-rich source to bail-out troubled companies when its  first and last agenda should be to promote the best interests of the EPF contributors.

In the 1980s, the EPF was raided to fund dubious transactions resulting in the EPF-Makuwasa scandal, causing huge  losses to the EPF.  

The EPF-Makuwasa scandal came about because the government wanted  to recoup the RM600 million losses suffered in a misguided attempt to corner the London tin-market through the Maminco operations in the early eighties, which backfired instead.  

In recent times, the EPF’s involvement in the  RM1.88 billion Time dotCom IPO fiasco last year and dubious and questionable loan facilities running into billions of ringgit to various mega-projects and companies, like the billion ringgit loans to Perwaja Terengganu Sdn. Bhd., Time Telecommunications Holdings Bhd. (renamed Time dotCom), Bakun hydroelectric dam project, etc., have brought to the fore the question as to whether the safeguarding of the EPF members’ interest had been subordinated and even sacrificed to other considerations and agendas. 

The present  serious lacuna in the EPF Act, which does not provide for the accountability, transparency and scrutiny of the EPF affairs by the EPF contributors, must be rectified by the EPF Board adopting a new policy of accountability and transparency.  

For a start, the EPF Board  should make public a full list of all the  loan and bonds, stocks and shares as well as money market instruments bought with EPF funds to subject them to public scrutiny to demonstrate that there were no imprudent, injudicious or illegal investment of the RM186.95  billion EPF monies jeopardising the safety, liquidity and yield of the EPF funds.  

(13/3/2002)