DAP calls on MAKUWASA to repay EPF the $10 million with interest for share transactions which it bought from EPF at below market-price

by DAP Secretary-General and Parliamentary Opposition Leader, Lim Kit Siang, in Petaling Jaya on Monday, 2.6.1986:

DAP calls on MAKUWASA to repay EPF the $10 million with interest for share transactions which it bought from EPF at below market-price

The mysterious $2 company, MAKUWASA, bought 13 share counters from the Employees Provident Fund from August 1984 to March 1985 at below market prices, causing the EPF to lose $10 million profit which should have accrued to the credit of the five million EPF contributors.

Up to now, neither the EPF nor the Ministry of Finance, which is responsible for the Fund, had thought it important enough to explain to the five million contributors why $10 million of EPF money was given away as gifts to the $2 company, MAKUWASA. The Malaysian workers have a right to know why $10 million of their money were being used so that someone could be a SANTA CLAUS to MAKUWASA.

It is for this reason that the statement by MTUC President, Zainal Rampak yesterday, after chairing a meeting of 60 union representatives to discuss the recent EPF developments, should be a matter of grave concern by the entire working population in Malaysia.

Zainal Rampak, who was a member of the EPF Board but those term expired on May 25, said that the EPF Investment Panel was not made answerable to the EPF Board. He said that at recent board meetings the panel was evasive when asked to provide details of investments by the EPF.

Zainal added: “The panel was so secretive that frankly we as board members did not know what was going on. When asked details of share purchases, the panel would ether answer in general terms that so many millions were invested or put off answering the questions till the next meeting.”

“Eventually the panel never really answers the questions that the board puts forth.”

This is unbelievable, for the EPF Investment Panel had clearly acted ultra vires and illegally in disregarding the EPF Board. The EPF Investment Panel is a creature of the EPF Board, and is totally answerable to the board, and not a separate organisation which could override the EPF Board.

Section 48(1) of the EPF Act 1951 is very specific that the EPF Investment Panel is answerable to the EPF Board:

“4B(1): There shall be established an Investment Panel responsible for matters pertaining to the investment of the assets of the Board which shall be subject to such directions issued by the Board and approved by the Minister from time to time.”

If the EPF Investment Panel had acted in disregard of the authority of the EPF Board, then the EPF Investment Panel members should be held liable for the $10 million loss suffered by the five million EPF contributors for selling 13 share counters to MAKUWASA at below market-price.

I call on MAKUWASA Directors, who are listed in the Registry of Companies as (1) Mohd Alkaf bin Mohd. Kahar – NRIC No. 3532645, of No.19, Jalan 1/6 Taman Tun Abdul Razak, Ampang Jaya Kuala Lumpur; and (2) Bhupatrai M. Premji NRIC No. 3324133, of 4, Jalan SS 22/7, Damansara Utama, Petaling Jaya to immediately return the $10 million, together with interest, to EPF for the loss suffered by EPF contributors in selling the 13 shares counters at under market-price.

The DAP has set up a panel of lawyers, under MP for Bukit Bendera, Gooi Hock Seng, to study the legal aspects of the EPF Investment Panel, and unless MAKUWASA makes proper restitution of the $10 million plus interest, and the EPF or Minister of Finance gives proper explanation of this EPF scandal, we will consider the institution of legal action to protect the interest of the five million EPF contributors.