EPF is alleged to have lost half a billion ringgit or more due to dodgy sales of MAHB shares that it owned.
What are the details?
I am not going to address the details here. If you want to know the details, just click here and here and here, to get the details. For the purpose of this article, it is sufficient that we know that there is an allegation of a massive loss in EPF and that the loss might not only be natural, but involves some criminal element.
Why should we take this allegation seriously?
We should take it seriously because the people who made the allegations are heavyweights. The accusation is being levied by such people as Wee Ka Siong and Datuk Lawrence Low, who are the MCA president and vice-president respectively. Most recently, Tengku Razaleigh, the former finance minister has also cast aspersions on the matter.
The words that they are using are also very strong.
Datuk Lawrence is insinuating that the way EPF handled the MAHB share sales is a crime.
“If anyone is found guilty of negligence or personal gain, they must be held accountable,” he says.
“We need to stand firm and question whether the EPF was negligent or carrying out power abuse. But more importantly, we must also ask: who was it exactly that benefited from this RM500 mil loss,” he is also saying, as if he believes that some kind of abuse of power did in fact occur.
Tengku Razaleigh in his turn used the word “unforgivable" to describe matter.
“According to previous experience, we have an investment panel which oversees the operations of EPF. Surely they wouldn’t blindly sell shares and then repurchase them at a clearly higher price, causing losses to EPF. I believe this is an unforgivable manipulation. The police and MACC must investigate this issue,” he said in a video posted online.
Other than these prominent personalities, professional groups like the independent directors of MAHB the independent consultants at Hong Leong Investment Bank are also casting heavy aspersions about the matter.
If even professionals believe this move was unreasonable, then the problem is likely far beyond a simple mistake.
Now I might not know much about things like share sales or corporate affairs, but I know people, and I have common sense, and in my view, people like Wee Ka Siong and Tengku Razaleigh look to me like people who know what they are talking about when they are talking about such things as corporate dealings and share sales, so when they say that all is not well in EPF, it makes me very uneasy.
Now I am aware that Tengku Razaleigh, Wee Ka Siong and Datuk Lawrence might not be happy with the current government, and they might just be using this issue to undermine this government, but even after taking that into account , I really think that the authorities need to take their allegation seriously, because the subject that they are talking about, which is EPF, is of immense importance to the people of the country.
We can survive governments coming and going, but we can’t survive if something bad happens to EPF, because there are wolves in sheep's clothing, that are sitting in powerful positions in EPF.
Has EPF and the government responded to the allegation?
Yes.
In a statement it released, EPF has reassured that no such hanky panky as alleged could have occurred, because of something called a “Chinese Wall” policy it practises, which keeps its share trading team separate from its investment team, to prevent wrongful access to insider information.
Was this explanation convincing?
Personally, I think to answer this allegation of this magnitude with just a phrase like “Chinese Wall” is not satisfying, and from the way that Wee Ka Siong lambasted this explanation, I find it even harder to be convinced that this explanation explains anything.
According to Wee Ka Siong, there might be someone in EPF that is above the Chinese Wall.
"Who are they? The CEO or the Board of Directors? Why didn’t these "above the wall" individuals use their wisdom to make decisions that would ultimately benefit EPF contributors?” he asks, in a way that shatters any reassurance that EPF has given with its “Chinese Wall” explanation.
What is the government saying?
According to Finance Minister II Amir Hamzah Azizan, not only did EPF's MAHB transaction not suffer any loss, what more a loss to the tune of RM 500 million or more, it actually gained RM102 million in profit from selling the share.
"Based on this statement, the EPF recorded a profit from the sale and purchase of MAHB shares, contributing to total investment income of RM63.48 billion for the financial year ended Dec 31, 2023," he said during the Ministerial Question Time in the Dewan Rakyat.
Was Amir Hamzah’s explanation convincing?
Nope.
Why ?
Because according to critics, Amir did not address the crux of the allegation. Instead he sidestepped the issue, by answering something about the allegation, without addressing the crux of the allegation. (To read about the details of how Amir side stepped the matter, click here)
Now to me, the fact that the critics of his reply are saying that Amir is using the “touch it but don’t address it” method to reassure us that everything is A-ok in EPF, is a huge red flag, because in my experience, the “touch it but don’t address it” method is is how clever people bury incriminating evidence that they do not wish to come out in the open.
They bury it, by giving the impression that they have addressed it, without actually addressing it meaningfully.
That at a time when this scandal is developing, EPF is projected to announce a dividend rate of between 6.0 per cent and 6.2 per cent for 2024, supposedly because it has done very well for itself due to robust global and domestic economic conditions, is also making me feel very uneasy.
Personally, I don’t think that 2024 was that great a year for the global economy.
If you look at the last 5 years, EPF announced a dividend of 5.45, 5.2, 6.1, 5.35, 5.5 percent respectively for the years 2019, 2020, 2021, 2022 and 2023 respectively.
In the last 5 years, the only time that EPF has announced a dividend above 6 percent was in 2021, right after the pandemic shut down the global economy in 2020 and massive amounts of money were withdrawn from EPF by contributors to deal with the loss of income during the pandemic years.
So rather than see the 6 to 6.2 percent dividend that EPF is intending to give for the year 2024 as a sign that EPF has done well for in 2024, I am more inclined to believe it as a as sign that EPF wishes to project the image that it has done well in 2024.
The fact that I suspect that it is trying to project an image, is thus making me question even more what the reality is .
Anyway, to cut a long story short and bring this matter to a conclusion, as a member of the public, I have to agree with the critics of the EPF in the MAHB share transaction issue, in that the best way to put this matter to rest, is by just declaring who profited from the alleged RM 500 losses that EPF suffered due to the MAHB share transaction?
If the MAHB share was bought and sold by random run-of-the-mill investors, then all fine and well.
If say 50,000 of our average investors bought the shares, which resulted in RM 500 million from EPF’s coffer being transferred to their bank balance, then each of the investors would have made an average of RM 10, 000.
If that be the case, then we shall just close this entire chapter by considering that EPF’s losses was just a naturally occurring event, that is part and parcel of buying and selling shares, and there is nothing to worry about EPF’s losses, because the ones who gained from it, were just 50,000 of our own people.
However, if there are just a handful of corporations or ultra-rich people that have made a gain from EPF’s losses, then this is a serious problem, because it indicates that our money is not in safe hands.
An enemy can be forgiven, but like Tengku Razaleigh said, there is no forgiveness for a traitor.
If there is a traitor in EPF, they must be found, and they must be made an example of, to show any other aspiring traitors, what happens to those who betray the public trust.
Who profited at EPF’s expense, that is the question.
The government or EPF must come out to reassure us that EPF’s losses were enjoyed by a large number of people, and not just a handful of corporations or individuals.
I am sure that EPF and the government have the data and information to reassure us in this manner, and we hope that the critics of EPF will keep on pressuring EPF and the government to give us this reassurance at the earliest possible date.
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