DAP calls for nation-wide protests by the
10.3 million EPF contributors at the outrageous lowest dividend in 40 years
of 4.25 per cent when it should be 5.43 per cent and to demand total EPF
accountability and transparency for its stewardship of RM203 billion EPF
by Lim Kit Siang
calls for nation-wide protests by the 10.3 million EPF contributors at the
outrageous lowest dividend in 40 years of 4.25 per cent for 2002 when it
should be 5.43 per cent and to demand total EPF accountability and
transparency for its stewardship of RM203 billion EPF monies.
The declaration yesterday of the lowest EPF dividend in 40 years has cast a
dark shadow on this year's May Day celebrations in less than a fortnight,
and the 10.3 million EPF contributors must make clear their disagreement
with the Acting Prime Minister, Datuk Seri Abdullah Ahmad Badawi who
defended the 4.25 per cent EPF dividend for last year as "the best that can
be given under the circumstances".
EPF Board Chairman Tan Sri Abdul Halim Ali said that the lowest dividend in
40 years is a reflection of the difficult investment environment of a low
interest rate regime for the last four years as well as a lackluster stock
These are not the only reasons for the outrageous EPF declaration of the
lowest dividend in 40 years, as EPF should be able to declare a dividend
higher than that of 5% for 2001 as the country had registered a higher
economic growth of 4.2 per cent as compared to 0.4 per cent for 2001.
In fact, EPF should have been able to declare at least 5.43% for 2002 if not
for the high provision of RM2.14 billion for paper losses in equity last
Abdul Halim said yesterday that for the year under review, the EPF required
RM1.82 billion to pay a one per cent dividend rate to its 10.3 million
members compared with RM1.67 billion in 2001.
If EPF did not have to set aside RM2.14 billion for paper losses in equity
and this amount could be released for the declaration of dividend, the 10.3
million EPF contributors would be able to get a dividend of 5.43 per cent -
higher than the 5 per cent dividend for 2001.
The EPF Chairman gave no details nor any explanation as to why the EPF had
to make the higher provision of RM2.14 billion for paper losses in equity,
except for the technical explanation that it is "an additional prudent
measure in line with international accounting principles".
The 10.3 million EPF contributors
have no quarrel with the "additional prudent measure" of higher provision
for losses in line with international accounting principles, but they
definitely have the right to know why the EPF had been so imprudent as to
invest in equities which resulted in such multi-billion ringgit losses
dragging down the EPF dividend to the lowest level in four decades -
together with the full list of the investments on the equities which had
gone bad, their identities, the dates, volume and cost of the investments,
and the losses incurred.
I remember that whenever I had raised these dubious EPF investments and
their losses in the previous Parliament, they were invariably dismissed by
the Finance Minister and his subordinates as mere "paper losses" and that
there was nothing to worry!
Now the chickens of these "paper losses" have come home to roost, depressing
the EPF dividend for last year to 4.25 per cent when it should be at least
5.43 per cent. Why should the 10.3 million EPF contributors now have to pay
with hard-earned cash from their life-savings for what Barisan Nasional
Ministers and leaders had claimed were mere "paper losses" from dubious EPF
The EPF Chairman , Board and Investment Panel had not been fully frank,
accountable and transparent as to the total amount of "paper losses" in
equity which had been incurred by EPF.
The EPF Board and management had not denied published reports that EPF had
been hit by a RM10 billion "paper loss" in equities and that it had been
camouflaging these losses in its accounts.
EPF should clarify whether these colossal losses are to be written off in
the next five years, and whether it would depress EPF dividend by more than
one per cent every year for this period as a result.
The 10.3 billion EPF contributors are entitled to demand that the EPF come
clean on the RM10 billion paper losses in equity and to give a full detailed
Only four days ago, I had asked as to why there is the longest delay in 50
years to announce the lowest EPF dividend in 40 years, as in the past half a
century, the EPF dividend for the previous year would normally be announced
in February, and only on rare occasions in March, but never as late as
Was Abdullah, the Acting Finance Minister, waiting for the return of Datuk
Seri Dr. Mahathir Mohamad to his duties as Finance Minister for the bad news
to be made public or had he directed the EPF Board to reconsider its
decision on the lowest dividend in 40 years, demanding a full public
accountability and transparency to keep the trust of the 10.3 million EPF
It would appear that there could be another reason for the long delay in
announcing the EPF dividend for last year - until after the Dewan Rakyat
meeting so that it would not become an issue in the recent meeting of
The Cabinet on Wednesday must demonstrate its concern at the lowest EPF
dividend in 40 years, and decide on at least five measures, viz:
a full and satisfactory
explanation for the EPF declaring the lowest dividend in 40 ears to convince
the 10.3 million EPF contributors that this was not because of
mismanagement, imprudent equity investments, bad loan decisions or bail-out
operations gone wrong;
amendment of the 1991 EPF Act to
allow for direct representation of EPF contributors on the EPF Board and EPF
a new EPF policy on accountability
and transparency, as making public its shares dealings in the stock market
and beneficiaries of its loans;
a mechanism for interaction
between the 10.3 million EPF contributors and the EPF Board, Management and
Investment Panel; and
"green light" for establishment of
an EPF Contributors' Association.
The 10.3 million EPF contributors
on their part should organize themselves to mobilize nation-wide support for
greater accountability and transparency of the EPF stewardship of the RM203
billion of EPF investments. Bringing the EPF to full account of the 10.3
million EPF contributors should be the theme of the 2003 May Day.
Lim Kit Siang, DAP National