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AWSJ: EPF Not Accountable - MTUC
By Cris Prystay

13/4/2001 7:32 pm Fri

[MTUC akan mengadakan piket besar-besaran di seluruh negara membantah penyalahgunaan dana KWSP, pengurangan potongan, kadar dividen yang rendah, ketidak telusan pelaburan KWSP, penglibatan di dalam skandal time dotCom, dan macam-macam lagi. KWSP tidak bersikap amanah dan bertanggungjawab kepada pencarum.

Tetapi Roslan Ghaffar, pengarah senior unit pelaburan KWSP menyanggah MTUC. Katanya panel pelaburan KWSP membuat keputusan pelaburan yang tidak perlu merujuk kepada lembaga pengarah KWSP - ia entiti yang berbeda.

Tetapi panel tersebut dilantik oleh Daim dan tidak perlu memberi sebab kepada sebarang keputusannya untuk melabur dana sebanyak RM181 bilion itu.

MTUC merungut ia tidak mampu bersuara dalam KWSP walaupun ia mempunyai 5 wakil dalam 18 lembaga pengarah KWSP. Ketidak telusan lembaga pelaburan KWSP serta sikap bertanggungjawabnya amat dikesalkan. Sudah tiada jalan lain melainkan membuat bantahan besar-besaran agar nasib pekerja tidak permainkan sesuka hati. Mahathir memang tidak ingin ini berlaku kerana bimbang ia akan menjejaskan lagi populariti beliau - apatah lagi jika ia berbau dan merebak ke perhimpunan agung Umno. Beliau mencemuh kerajaan kini sudah terlalu banyak masalah - piket MTUC hanya akan menambahkan masalah itu lagi.

Apa yang dilakukan oleh MTUC bukannya masalah - sebaliknya Mahathirlah yang menjadi punca masalah kerana tidak mahu mendengar rintihan rakyat dan langsung tidak mahu berundur bila rakyat mempertikaikan tindak-tanduknya. Dia mahu rakyat angguk sahaja walaupun rugi berjuta.

MTUC mempunyai 550,000 ahli banyaknya Ia mewakili 230 kesatuan akan mengadakan piket di seluruh negara di hadapan pejabat KWSP nanti pada 12/5/2001. -Editor]

The Asian Wall Street Journal
12th April 2001

Labor Groups Say Pension Scheme
Isn't Accountable for Its Decisions


KUALA LUMPUR, Malaysia -- Government officials and the biggest labor organization escalated their confrontation over union allegations that Kuala Lumpur has mismanaged the country's national pension fund.

At a conference Wednesday, Roslan Ghaffar, senior director for investment and economic research for the state-run Employees Provident Fund, contested claims by the Malaysian Trade Union Congress, or MTUC, that the EPF panel that makes investment decisions isn't accountable to the fund's board of directors.

"The [panel's] chairman makes reports each quarter to the board," he said. "If there are any questions, we answer them." But Dr. Ghaffar shed little light on the degree of control the board has over the investment panel -- which is dominated by officials from Malaysia's finance ministry and central bank. But he acknowledged that the EPF board and the fund's investment panel are "two separate entities."

The EPF's investment panel reports to the finance ministry and is appointed by Finance Minister Daim Zainuddin. The panel doesn't publicly explain its decisions, which allocate the EPF's 181 billion ringgit ($47.63 billion) in funds contributed by salaried Malaysians and their employers among a variety of domestic investments, including equities.

The MTUC has complained about the lack of transparency and accountability of the EPF investment panel. Union representatives have five seats on the EPF's 18-member board, but grouse that they have no say on the fund's investment decisions. On Monday, in an unprecedented move, the 550,000 member MTUC -- which represents 230 unions -- called for a countrywide picket of EPF offices on May 12.

The union group cited, in particular, the EPF's investment last month in Time dotCom Bhd.'s controversial initial public offering as an example of the misuse of EPF funds. The EPF invested 269 million ringgit in Time dotCom stock in an IPO that independent investors shunned. The company's stock has slumped 40% since it began trading, giving the EPF a paper loss of about 110 million ringgit on the investment. Time dotCom is a subsidiary of Time Engineering Bhd, a company controlled by the Renong Bhd. conglomerate, which has historic links to Malaysia's dominant political party.

The MTUC also is angry over a government decision to cut employee contributions to the EPF by two percentage points this year in a bid to boost consumer spending. The EPF board had voted the proposal down late last year, but was overruled by the finance ministry.

Earlier this week, Prime Minister Mahathir Mohamad lambasted the MTUC for calling for a public protest. He told the labor group that it "shouldn't raise issues' at a time when Malaysia faced tough economic challenges.

Siva Subramaniam, the head of a separate civil servants' union, agreed with the prime minister Tuesday. He told Malaysian reporters there were "other pressing needs," such as racial integration and economic stability, on which the government should focus. Kumpulan Wang Amanah Pencen, the civil servants' pension fund, bought a 10.8% stake in Time dotCom through its IPO; Mr. Subramaniam declined to comment on that investment, which has left the pension with a paper loss of about 365 million ringgit.

MTUC's president, Zainal Rampak, who is a senator in Malaysia's Parliament and a member of Dr. Mahathir's United Malays National Organization, said the planned protest will go ahead. He added that he would continue to push for greater transparency on investments the EPF makes. In February, the EPF announced its lowest dividend payout in 26 years, prompting union leaders to question more closely the fund's investments.

Dr. Ghaffar, in a speech to a debt conference Wednesday, said part of the EPF's mandate is to serve as a source of financing for national development. The pension fund's asset allocation has shifted in the past decade as the EPF took a larger role in financing the government's privatization plans, for example, he said. The proportion of Malaysian government securities in the EPF's portfolio dropped to 34% in 2000 from 79% in 1990, while the proportion of loans and bonds it holds rose to 20.7% in 2000 from 8.2% a decade ago.

Dr. Ghaffar said, however, the EPF will no longer take stock as collateral for loans it makes to corporate borrowers -- a move that could affect corporate restructuring and government privatization plans. He said the EPF instituted the policy, which he deemed temporary, after Asia's 1997 economic crisis "due to market volatility." Still, the volume of loans extended to corporate borrowers by the EPF increased in 1998 and 1999. "Most other institutions were reluctant to lend, so that's why we increased our loans," Dr. Ghaffar said.

Some of those loans turned sour. Last year, the EPF agreed to allow Time Engineering -- Time dotCom's parent -- to repay half a 500 million ringgit short-term loan in cash and half in shares in Time dotCom. Mr. Ghaffar told reporters the debt-equity swap was a separate issue from the collateral policy. "At least we don't have the loans on our books," he said.

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