EPF Boleh! [Must Read]
By Martin Jalleh
25/3/2002 3:25 pm Mon
The "biggest" fund manager in Malaysia - with funds
totaling RM181 billion in 2001 - pays to its contributors
the "smallest" dividend ever in 38 years -- accompanied by
a multiple of excuses!
It is rich enough to buy almost half of the total listed
shares in the country -- but can only afford a paltry
dividend of five per cent - whilst other funds like
Permodalan Nasional Berhad have been able to chalk higher
It could pay a dividend of 8.5% during the 1986 economic
crisis and 6.7% at the height of the economic downturn in
1997 -- but only 5% based on a year when the economy was
"recovering" and economic fundamentals strong.
It is richer than any bank in the country or perhaps even
all the banks put together, yet it says it can only pay a
dividend equivalent to the fixed deposit rate offered by
banks in the country!
It says it is committed to the country's progress or what
it terms, "the nation's socio- economic development" -- yet
it has been giving its contributors "progressively" lower
annual dividends after 1995.
Its chairman blames "a higher provision for diminution in
the value of equity and increasing doubtful loans" for the
abysmal dividend - but remains mum on why the Fund has been
categorising more investments as "doubtful loans".
In 2001 it had categorised RM1.41 billion of the fund's
investments as "doubtful loans" -- a big increase from the
RM754 million for 2000 - thus leaving the public with
serious doubts over the "doubtful loans".
More than a quarter of the total "doubtful loans",
estimated around RM500 million, was used to rescue the
ailing telecommunications company Time dotCom Bhd. in 2001,
which has become a big black dot on its credibility.
More than a quarter of the total "doubtful loans", estimated around RM500 million, was used to rescue the ailing telecommunications company Time dotCom Bhd. in 2001, which has become a big black dot on its credibility.
It lost, in that year, some RM110 million of the people's
money in this dubious transaction - yet it still insisted
that it was an investment which it had no doubts on, and
one that was "based on sound financial considerations".
Its Chairman could still declare very proudly: "Every
single sen of the rakyat's money is safe, there is no
danger of their money being lost as it is invested in a
very prudent manner" (The Sun, 13.04.01)!
He said it even in spite of the loss of massive amounts of
public funds due to its "prudent strategies" in bailing out
companies such as Perwaja Terengganu Sdn Bhd (RM600 million
loss) and Sistem Transit Aliran Ringan Sdn Bhd (STAR).
He said it even in spite of the loss of massive amounts of public funds due to its "prudent strategies" in bailing out companies such as Perwaja Terengganu Sdn Bhd (RM600 million loss) and Sistem Transit Aliran Ringan Sdn Bhd (STAR).
(It gave STAR more than RM600 million in loans even when
the company was operating at a loss -- resulting in the
Fund's equity stake of RM135 million being subsequently
written off and it's share of the loss amounting to RM96
million in 1999!)
Then there were the stupendous losses through its
associate/subsidiary companies such as Malaysia Building
Society Bhd, YTR Harta Sdn Bhd, Affordable Homes Sdn Bhd,
Malaysian Capital Venture Sdn Bhd, Project Banda Samarian,
No one really knows the actual extent of EPF's "prudent"
losses through the years - and they are not telling - in
spite of the eloquent promise in their Mission Statement to
"communicate openly and sincerely".
Its Chairman had used the excuse of 'the external financial
environment" being the reason for the low five per cent
dividend -- there was not a word on its internal
weaknesses, woes and warts -- which have become so
glaringly evident, and for a very long time too.
Its "primary mission", it wants everyone to know, is "to
provide retirement benefits for our members" -- yet in
recent years it has come out with an increasing number of
schemes for contributors to withdraw money early instead of
strengthening their retirement position.
Its Chairman says "proper accounting is done for all
investments after detailed deliberations by a panel who
knows the market" -- but he forgets to add that the
investment panel reports to the Finance Minister and is not
answerable to the Board!
This farce, this fiasco...this folly...before the whole
nation continues -- only the Employees Provident Fund can!