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AWSJ AWise: MTUC Irked By Dividend - Will Picket As Planned
By Lynette Ong
9/5/2001 9:27 am Wed
[Jika anda membaca rencana ini anda seharusnya tidak mempunyai
alasan untuk tidak berpiket nanti. Perhatikan graf di dalam rencana
ini kerana ia membawa seribu arti kearah manakah wang anda telah
diperjudi selama ini. Padahal yang mencarum semakin ramai dan yang
berhenti tidak pula banyak sehingga perlu jadi begini. Piket MTUC
ini harus diberi perhatian kerana ia jarang berlaku dalam negara
kita yang terlalu mencengkam kesatuan sekerja ini.
Mengapa KWSP memberi dividen yang terlalu rendah sedangkan dana
lain mampu memberi pulangan yang lebih tinggi seperti PNB dan ASN?
Rencana ini mendedahkan KWSP selalunya menjadi tumpuan terakhir
syarikat (kroni) peminjam yang sudah ditolak oleh bank kerana
terlalu bermasalah (sehingga bank pun gerun). KWSP meminjamnya
dengan saham sebagai kolateral seperti kes Time Engineering
yang mendapat RM500juta. Syarikat ini tidak mampu membayar
hutangnya kepada KWSP pada bunga 9% dan KWSP pula dengan bodoh
menukar hutang itu kepada ekuiti time dotCom. Akibatnya ia rugi
RM100 juta di atas kertas dalam beberapa hari sahaja.
MTUC kesal ketidak telusan panel KWSP yang mengandungi pegawai
dari Menteri Kewangan dan Bank Negara yang membuat semua keputusan
tanpa merujuk kepada lembaga pengarah. Walaupun MTUC mempunyai
wakil dsalam KWSP, mereka tidak dapat berbuat apa-apa kerana
tidak berkuasa menegur - mereka hanya menjadi patung hiasan sahaja.
Sikap KWSP ini meremukkan lagi imej keterlusan dan pengurusan
koporat dalam negara. Standard and Poor baru-baru ini merendahkan
lagi reputasi koporat Malaysia dari 'positif' kepada 'stabil'.
By Lynette Ong, AsiaWise
3 May 2001 12:30 (GMT +08:00)
The Malaysian Trade Union Congress (MTUC), the country's largest
trade union, has called on its half a million members to picket the
Employees Provident Fund (EPF) offices on May 12. In a country where
union power is weak and trade unions dormant, this is something worth
paying attention to.
Under the Employees Provident Fund (EPF) mandatory pension scheme,
employers currently contribute 12% of salary towards an employee's
EPF account, while employees contribute between 9-11% of their
monthly salary. The EPF's coffers are now swollen with the
accumulated contributions of 10 million workers' forced savings --
about 184 billion Malaysian ringgit, or $48 billion.
Picketers will have a lot to talk about when they gather May 12. Last
year's EPF dividend payout of 6% was the lowest in 26 years; then
there's the EPF's purchase of TimedotCom shares -- they plummeted
after the company debuted last year on the Kuala Lumpur Stock
Exchange (KLSE); and the TimedotCom debacle is only a part of the
debate about the EPF's lack of transparency and accountability in
The chart below shows the dividend rates of the EPF's payout since
1974. The rate stayed at or above 7% for 20 consecutive years during
1976-96. It rose to an all-time high of 8.5% between 1983-87. The
minimum dividend rate cannot be less than 2.5% as stipulated in the
The EPF's net income fell from RM10.24 billion in 1999 to RM10.18
billion in 2000 -- this was despite an increase of RM48 million in
gross income and a decline of RM26 million in death and disability
benefits payout over the period. The difference is the staggering
loss in equity investment, which rose by 21% last year.
The EPF invested 22% of its assets in equities last year -- close to
the maximum 25% permitted by law. Fund chief Abdul Halim Ali
attributes the low dividend payout to the stock market crash in 2000.
The KLSE plunged by nearly 50%, from a high of 1,014 in February last
year to 589 in April this year -- but other state-backed fund
managers managed to pay decent dividends. Permodalan Nasional Bhd.,
the country's largest fund manager, paid a 7.8% dividend last year
and Amanah Saham Nasional paid 8.0% to subscribers.
Diminished stock market returns are only part of the EPF story. The
truth is, because of its financial clout, the EPF often becomes a
lender of last resort, offering loans to troubled corporations when
no commercial bank -- operating on the principle of maximizing
shareholder's value -- is willing to lend.
At the height of the 1997-98 financial crisis, the EPF's asset
allocation for loans and bonds rose to over 26% from 17% in 1995 in
an attempt to rescue many financially-troubled companies which would
have otherwise gone under. The EPF often accepted shares of the
troubled companies as collateral for loans -- indeed, that was the
genesis of the Time problem.
In 1996, the EPF approved a RM500 million loan to Time
Telecommunications Holdings Bhd., now TimedotCom, at 9% p.a. The
company was unable to meet its loan repayment shortly after and the
EPF agreed to take payment for half the outstanding loan in cash and
the remainder in equity after TimedotCom's IPO. Priced at RM 3.3,
shares were 75% under-subscribed. (They had been priced at the peak
of the Internet bubble and judged grossly overvalued.)
The EPF was left with 81.6 million TimedotCom shares totaling RM100
million worth of paper losses. EPF's investment in TimedotCom was
widely conceived as an attempt by the government to bail out its
parent company Renong Bhd, which was formerly an investment arm of
the ruling UMNO party. The MTUC also bemoans the lack of transparency in the EPF's
investment decisions. The EPF Investment Panel, which consists of
officials from the Ministry of Finance and Bank Negara, makes the big
decisions. But the panel is not accountable to the EPF's 18-member
board in which the unions have some representation.
The MTUC also bemoans the lack of transparency in the EPF's investment decisions. The EPF Investment Panel, which consists of officials from the Ministry of Finance and Bank Negara, makes the big decisions. But the panel is not accountable to the EPF's 18-member board in which the unions have some representation.
The EPF saga puts the country's already-dented reputation in the
spotlight once again for its lack of transparency and corporate
governance. Standard & Poor's recent downgrade of Malaysia's credit
rating from 'positive' to 'stable' further supports this proposition.
Malaysia is not the worst in Southeast Asia so far as corporate
governance goes, but it has gone backward, not forward since the '97
crisis. It is going to take more than capital controls to keep
foreign investors' money in the country.
Malaysian Trade Union Congress
By CRIS PRYSTAY
Staff Reporter of THE WALL STREET JOURNAL
KUALA LUMPUR, Malaysia -- The Malaysian Trade Union Congress vowed to
push ahead with plans to picket the offices of the national pension
fund on May 12 after a meeting with Malaysian Human Resources Minister
Fong Chan Onn over union complaints about the fund's management ended
in a deadlock.
Thursday's meeting was the latest step by the government to avert the
unprecedented protest by the MTUC, which represents 550,000 workers in
230 unions. The Employees Provident Fund manages 181 billion ringgit
($42.53 billion or 47.63 billion euros) in retirement funds for 9.7
million salaried Malaysians, who make mandatory monthly contributions
to the fund.
"At the moment, there's nothing conclusive" from the government in
response to union complaints, MTUC Secretary General G. Rajasekaran
said after the meeting. "[Dr. Fong] has not given us any reason to
reverse our decision to picket." Union leaders expect the countrywide
protest will draw about 50,000 workers.
Earlier this week, Dr. Fong met with EPF management and raised the
issue at a government cabinet meeting in a bid to preempt the union
Union leaders had promised to call off the picket if the government
agreed to drop a controversial alternative pension scheme administered
by private insurers and to rescind a decision by the EPF board last
year to reduce a death and incapacitation benefit for workers. The
reduction lowered that benefit to a flat rate of 2,000 ringgit from a
range of 1,000 ringgit to 30,000 ringgit.
The union also wants the EPF to make it easier for workers to increase
their monthly contributions -- currently set at a minimum of 9% of
wages -- if they wish to do so. Dr. Fong said an agreement had been
reached on this point, but said he could only offer possible
compromises on the other two issues.
"We decided to focus on these three issues, provided they agreed to
talk about the others later. But we didn't even get far on these
three," Mr. Rajasekaran said.
The MTUC has also complained about a perceived lack of transparency
and accountability in EPF investment decisions, which are made by the
pension fund's investment panel. Union representatives have five seats
on the EPF's 18-member board, but the MTUC is demanding that labor
representatives hold at least half the board's seats.
The fund's investment practices came under fire in March after the EPF
took a 3.22% stake in Time dotCom Bhd., a telecommunications company
controlled by the politically influential Renong Group. The EPF agreed
to take most of that stake as partial repayment for a 500 million
ringgit loan the fund made to Time dotCom's parent, Time Engineering
Bhd., in 1996. The loan wasn't repaid.
To compensate for the bad loan, Time Engineering agreed to repay half
the loan in cash and half in the form of 78.7 million Time dotCom
shares valued at their initial-public-offer price of 3.30 ringgit
each. The EPF also bought another 2.85 million Time dotCom shares in
January under a restricted sale offer in the run-up to the IPO in
Time dotCom's IPO was 75% undersubscribed and its stock price has
plunged about 35% since its shares began trading, reducing the value
of the EPF's investment by about 100 million ringgit on paper.
Write to Cris Prystay at email@example.com