Speech by Parliamentary Opposition Leader, DAP Secretary-General and MP for Tanjung, Lim Kit Siang at the Sungai Nibong DAP Branch annual general meeting held at Sungai Nibong on Wednesday, 8th April 1987 at 8.30p.m.
DAP calls for a Royal Commission of Inquiry into the $500 million EPF shares scandal and why EPF is losing tens of millions of dollars from imprudent and illegal non-trustee/investments/stock.
Although it is new one month since the tabling in Parliament of the Auditor-General’s Report on the 1985 EPF accounts, the 4.8 million EPF contributors had not been given any satisfactory explanation as to why the EPF Investment Panel and EPF Board had made imprudent, and illegal non-trustee investments loading to tens of millions of dollars of losses.
According to the Auditor-General, EPF invested $517.52 million in the shares market, in 1985, and suffered a loss of $55.97 million, which exceed 10 per cent of its total equity investments.
What is even more shocking is that the EPF Investments Panel had been involved in imprudent and even illegal non-trustee stock investments.
I would have expected a responsible EPF Board and Investment Panel would have come out with a full detailed statement to account to the 4.8 million EPF contributers how it had invested their monies meant for their social security after retirement.
But there has been complete silence from the EPF. It would appear that the EPF Board and the EPF Investment Panel are behaving as if the $24,000 million EPF funds is their private property, rather than a trust which they have to account to the 4.8 million EPF contributors.
For instance, the 4.8 million EPF contributors are entitled to know the reasons for the EPF’s imprudent investments, like the concentration of about 65% of the investments in nine companies – the biggest being Cycle $ Carriage which amounted to $82 million. At the end of 1985, EPF lost $23.6 million from its investments in Cycle $ Carriage, and this loss would have shot up to $40 million by the end of 1986.
The EPF Investment Panel Should also explain whether it is true that EPF has lost about $10 million from its investments in Supreme, Grand United and Pan Electric loan stock shares.
There has also been no explanation from the EPF to the 4.8 million EPF contributors about the Auditor-General’s comments that the EPF had infringed Section 4(2)(b) of the 1951 EPF Act in investing $18.86 million in non-trustee stocks. The EPF Investments Panel should also explain whether it is true that in 1985, EPF lost some $10 million from this unlawful $18.86 million investment in non-trustee stocks?
Apart from this unlawful investment of $18.86 million in non-trustee stocks by EPF itself in 1985, the EPF’s portfolio’s mangers also invested $31.95 million in non-trustee stocks in 1985. How much losses did EPF suffer in 1985 and 1986 from this second bundle of unlawful investment of EPF funds in non-trustee stocks?
The Auditor-General had commented in his report that the EPF portfolio managers had both violated the EPF Act as well as their Contracts with EPF in investing in the non-trustee stocks. Has the EPF taken legal action against there portfolio managers, who are either merchant bankers of brokerage firms, to get them to reimburse the EPF for the multi-million dollar losses from much unlawful investments?
Up to now, the EPF has also refused to throw more light on the mysterious $30 million contribution to a special Treasury Fund to jack up the share prices in 1985.
Somewhere along the line, the EPF Investment Panel and Board have lost sight of the EPF’s role as the custodian of the social security needs of the nation’s work force, and has become instead a fund to take part in shares speculation.
The EPF Investment Panel should be ensured, however, not only because of the $500 million EPF shares scandal, but for its utter contempt for the rights of the 4.8 million EPF contributors to information as to how their $24,000 million EPF monies are being utilized.
The DAP calls for a Royal Commission of Inquiry into the $500 million EPF shares scandal and why the EPF is losing tens of millions of dollars from imprudent and illegal non-trustee stock investments.
The DAP also demands amendments to the 1951 EPF Act to spell out the rights of the 4.8 million EPF contributors to information about how their $24,0000 million EPF funds are being utilized and invested. Is anyone in his right mind suggesting that the publication of the entire list of companies EPF had invested would seriously endanger the stability of the stock market?
The time has come for the 4.8 million EPF contributors to take a more active part to monitor and supervise the activities of the EPF Board and Investment Panel, and it is for this reason that the DAP is launching a nation-wide campaign to demand greater accountability by the EPF in the $500 million EPF shares scandal.
The DAP will held three EPF contributor’s protest meeting in Petaling Jaya, Penang and Ipoh on the occasion of this year May Day to mobilize greater worker and public support for the demand that the EPF Investment Panel and Board must account to the EPF contributors for its investments.
The DAP has formed a National Committee To Demand Greater EPF Accountability under the chairmanship of DAP Deputy Secretary-General, Ahmad Ner, to spearhead this campaign.