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Tuesday, December 16, 2008

> DAP asks again for Valuecap accountability

The DAP is calling for shares bought with the RM5 billion Employees Provident Fund injection into Valuecap to be made public.

This comes on the back of a 60 per cent drop in EPF's investment income for the third quarter of the year.

Secretary-general Lim Guan Eng said that this development called for more prudent management of the retirement fund.

"This will certainly put pressure on the government to defend the move to lend the retirement fund's money to Valuecap," he said in a statement.

"Deputy Prime Minister Datuk Seri Najib Razak should reveal the full list of shares bought from the RM5 billion EPF injection to assure the public that the monies will not be used to bail out politically-connected companies," the Penang Chief Minister added.

Failure to do so by the finance minister, he said, must result in the cancelling of the injection into Valuecap, the state-owned investment company, as EPF's earnings have taken a hit in the third quarter of this year.

There have been concerns that the RM5 billion injection from EPF was meant to pay off Valuecap's loans due early next year to its shareholders.

Valuecap owes RM5.1 billion to Khazanah, the Pension Trust Fund Council and Permodalan Nasional Berhad but the government says the three institutions have agreed to extend the loan.

"The poor performance of EPF's investments has highlighted the dangers of EPF's RM5 billion loan to Valuecap, which is for the stated purpose of investing in what, the government says, are under-valued stocks.

"The question is who determines what company to invest in and how much they are under-valued is still hidden in a shroud of secrecy and wrapped in mystery," Lim said.

According to the Bagan MP, the RM2.06 billion EPF earned was a 60 per cent drop compared to the same period last year and also the previous quarter this year.

The lower results were primarily due to RM2.29 billion in diminution of equity investments due to the deterioration in market value.

"The public has a right to demand full accountability from EPF in demanding answers as to what were the investments it made that required RM2.29 billion in write-offs. And also which companies were the main culprits for such losses?" he said.

He said this raised doubts over EPF's ability to maintain last year's dividend of 5.8 per cent derived from the RM332.41 billion in contributions and assets belonging to nearly 6 million Malaysian workers - The Malaysian Insider.