It does look like a blatant abuse of power by the federal government to direct the Employees Provident Fund (EPF) to inject RM5 billion into ValueCap Sdn Bhd. It wil be in a form of loan from EPF.
Reason: to shore up “undervalued companies” on Bursa Malaysia.
Now most of us have our monies there, and it is supposed to be kept for retirement. After being used for bail out of companies during former PM Mahathir Mohamad time, now Najib Tun Razak, new finance minister and PM hopeful, is singing the same tune.
Does Najib have the right to direct the EPF to do such a thing? Loan RM5bil to a company to prop up its value in the share market?
The EPF is supposed to have independent consultants and experts to invest our monies in profitable companies, not to “maximise returns instead of investing for the purposes of supporting the stock market”, said DAP MP for PJ UTARA Tony Pua. Tony also asked a few questions (Malaysian Insider):
(1) What measures have been put in place to ensure that the RM5 billion will be utilised in a fair and transparent manner and not be used instead to bail out Government-linked or crony companies whose stock prices have plummeted during the current financial crisis?
(2) How will supporting the prices of stocks listed on Bursa Malaysia actually change the fundamentals, including but not limited to the efficiency and productivity, of our economy and its companies?
(3) Shouldn’t the government leave stock prices to market forces and focus spending on areas that will generate “high economic multipliers”?
While Second Finance Minister Tan Sri Nor Mohamed Yakcop said:
(1) EPF will make a profit from the RM5 billion that it is to lend to Valuecap Sdn Bhd
(2) This was based on the past performance of Valuecap which has grown its portfolio from RM5 billion initially to RM8 billion now.
(3) He believed that Valuecap will do well and EPF will certainly get their returns.
(4) Valuecap has good infrastructure, good staff that know better about the market and have a knowledge on what is happening (in the global market.
So, what do you think? Should RM5bil of our hard earned money go for this? Why aren’t the trade unions protesting about this?