Government wanted to borrow your Pension Fund

EPF (Employee Provident Fund) in its early statement has denied EPF involvement towards Value Cap business transaction.

EPF Denies Involment With Valuecap Sdn Bhd

The Employees Provident Fund (EPF) denies reports in today's newspapers (November 20, 2002) which associated the operations of ValueCap Sdn Bhd with the EPF's investments and two other state-run funds.

The EPF wishes to clarify that it has not appointed ValueCap Sdn Bhd to manage the EPF's investment fund. The EPF also denies that its involvement in the KLSE is to shore up the stock market. The EPF's investments are not used to bail out ailing companies.

The EPF invests in companies with sound fundamentals, long-term growth potential and competent management. The EPF is always prudent and professional in its approach when investing members' savings. The Fund ensures that the investments are safe, not exposed to high risks and gives reasonable returns to its members for their retirement.

(DR. ROSLAN A. GHAFFAR)
Deputy Chief Executive Officer (Investment)
Employees Provident Fund

Date: 20 November 2002

http://www.kwsp.gov.my/index.php?ch=p2news&pg=en_p2news_press&ac=1149〈=en

On the other hand, Najib Tun Razak (the newly appointed Malaysian Finance Minister 1) has given contradict statement; Value Cap Sdn Bhd to borrow money from your pension fund (my pension fund too). Read here: EPF to lend the RM5b to fund Valuecap

In the mean time, the 2nd finance minister, has told public that "value cap has done well" and EPF will be profited from this transaction.

My comments:

1. Government must be transparent if they want to use EPF money.

2. Is government really wanting to buy undervalue stocks (investing) or to bail out certain companies with the purpose to absorb buying support which is happening at Bursa Malaysia?

3. If valuecap was claimed "has done well" according to finance minister 2, why valuevap must borrow especially from EPF money? where the heck is the profit generated for the last 5 years?

4. In the era of internet age, i haven't seen about valuecap sdn bhd website to see its background, management, fund achievement managed by them.

5. Warren Buffett is one of the successful person who used value invest technique by buying stocks which undervalued. But, the transaction made by him is consistence, be it during market booming or crashing. As long as the price is accordance to his judgment though the overall index is rising and not necessarily down, buffer will still buy the stock. Recently, buffet just bought USD5 billion of Goldman Sachs.

6. Surprisingly, the fund achievement being managed by Warrent Buffet will be publicly announced. Not only that, all stakeholder Berkshire Hathaway will get letter from Warrent Buffet every year to enable him to report directly the progress of Bekshire Hathaway. You and I who are not even buying 1 unit of Berkshire Hathaway, also can have free access to the Berkshire Hathaway Report.

7. But this is not happening to Valuevap which been founded using public fund and yet want to borrow AGAIN using public fund.

8. Perhaps Valuecap can manipulate the law where by Syarikat Sdn Bhd is not obliged to declare its financial and operation but morally if they used public fund, the management need to be more prudent and transparent.

9. Petronas which is wholly owned by Malaysian government also publicly published their financial report to be read by civilians. Why valuecap can't follow good governance shown by Petronas?

10. Initial Step to borrow your money (my money too) is a bit confusing because what happens recently is due to sub-prime crisis where debts are not properly managed.

11. When all financial institution take overcautious action to loan money to any companies at this time, suddenly EPF is so generous to give loan to Valuecap. Not RM50,000, not RM500,000 not RM5 million but RM5 Billion!!!

12. I wonder what is the collateral being used by Valuecap that cause EPF to give loan these much money RM5 billion??

13. What will happen is valuecap loss and not able to repay the loan to EPF? Who would want to pay Rm5 billion? will it be the same to EPF contributors to hold responsibility like what has happened pension fund in US and Europe who currently has big loss because of sub-prime-crisis?

15. We, as the EPF contributor, must force EPF to be more cautious not to easily give such big amount of loan.

16. If government want to really really transparent, they should announce to public which undervalue that valuecap wants to buy using EPF money, so that the contributor can judge whether those company is really qualified to be bought using value investing concept.

17. Once it has been agreed that this transaction will happen, next thing to announce which financial institution will be profited from commission? Will it go to CIMB pocket which headed by Najib's Brother, Nazir?

18. Is Malaysian Facing the situation which is portrayed in Malay phrase:
“Keluar dari mulut Khairy buaya, masuk ke mulut Nazir naga?