As Acting Finance Minister, Abdullah should issue written directive to EPF to set up an independent inquiry to conduct “thorough investigation” into fraudulent withdrawals of EPF funds as well as to review its proposal to declare lowest dividend in 40 years
by Lim Kit Siang
(Petaling Jaya, Tuesday): Yesterday, the 10.5 million Employees Provident Fund (EPF) contributors felt slightly at ease when they read the front-page headlines of the local media on the “directive” by the Acting Prime Minister, Datuk Seri Abdullah Ahmad Badawi to EPF to investigate thoroughly the fraudulent withdrawal of millions of ringgit in unclaimed money from the fund.
Abdullah declared that there should be no compromise in bringing the culprits to book and that the investigation should also identify procedural weaknesses that could give rise to fraud. He rightly cautioned that the credibility and image of the EPF could be tarnished if it was seen as unable to protect contributors’ money.
Abdullah issued the directive to EPF when asked to comment on the latest
EPF scam involving EPF beneficiary warrants, which came to light on Feb 17
when a 25-year-old Indonesian woman, using a tampered identity card,
attempted to withdraw RM150,000 from a bank branch in Sungai Buloh.
The 10.5 million EPF contributors’ hopes and expectations that their over RM200 billion EPF monies are in safe hands, and that there would be a thorough investigation and major revamp of the EPF management to protect their life savings, were dashed today when they read the response of the EPF chairman, Tan Sri Halim Ali in this morning’s press.
Speaking to reporters yesterday after the official opening of Parliament by the Yang di Pertuan Agong, Halim conveyed no sense of gravity of the latest EPF scam which had led Abdullah to direct “thorough investigation” into the latest EPF fraud nor any indication that EPF would conduct any “thorough investigation” as directed by Abdullah.
Halim clearly did not share Abdullah’s concern that the latest EPF scam would affect EPF’s image and credibility, asserting the negative, saying:
“If people choose to cheat, we cannot do anything about it. But we have always managed to nab the culprits. In earlier cases too, all those involved were caught.”
Halim claimed that EPF “has continuously made efforts to tighten procedural weaknesses that can give rise to fraud” but admitted that it could not stop “dishonest people” from attempting malpractices.
He added: “Improvements, however, are being made to our procedures all the time. We also have our check and balances, but sometimes our officers can become confused especially if documents that look like genuine ones are used in attempts make fraudulent withdrawals.”
The EPF Chairman’s lukewarm response to Abdullah’s directive of “thorough probe” into the latest EPF scam will not inspire confidence of the 10.5 million EPF contributors about EPF competence and accountability in managing over RM200 billion EPF funds, especially with news reports that EPF will be declaring the lowest dividend in 40 years of below 5% for 2002.
As Abdullah’s “oral directive” to EPF to conduct “thorough investigations” into the fraudulent withdrawal of EPF monies have not been taken seriously, he should exercise his powers and responsibilities as Acting Finance Minister to send a written directive to the EPF Board to launch such a thorough investigation to protect EPF funds from fraudulent withdrawals, especially as there are some RM70 million unclaimed savings in the EPF. Better still, Abdullah should direct the EPF Board to set up an independent inquiry whose composition would not include members of the EPF Board or EPF employees to be responsible for such a “thorough investigation’.
In keeping with the principles of accountability and good governance, Abdullah should also direct the EPF to issue a full statement on the fraudulent withdrawal of EPF monies in the past five years, the amounts involved, the number of EPF employees implicated, and the outcome of court and/or disciplinary actions.
As Abdullah is also Acting Finance Minister, he should order a full review of the proposal to declare the lowest EPF dividend in 40 years, and demand a full explanation for instance as to why at the end of last year, the losses suffered by EPF from its RM50 billion investments in the local equities market were as high as RM10 billion.
* Lim Kit Siang, DAP National Chairman