The Great EPF Scandal

Of late the management of EPF has thrown caution to the wind and involved itself in some of the most ludicrous investment ever seen.Most of its recent ventures would not be considered prudent and yet EPF which is suppose to zealously and wisely invest employees contributed funds has ploughed their money in such absurd investment like purchasing a stake in the Healthcare company of Columbia Asia.This is an area of investment that it has no history of any knowledge and yet it was prepared to put employees hard earned savings in purchasing an equity in the company.Why was such an investment decision made and who made them?The whole deal stinks to the core and yet the management went through with the deal.
Last month EPF made a deal with an UMNO connected company, MRCB to purchase property worth $80million.If it was such a good deal surely EPF would be the last to benefit because MRCB is not known for its generosity in giving EPF a leg up for the investment.The ulgly truth is that MRCB found that EPF was a convenient cash rich vehicle to absorb its unsaleable assets.Without proper due diligence I would not be surprised that the properties were sold at highly inflated values.
Records obtained from the public domain indicate EPF have investments in the following companies:
1. Bank Islam
2. Bank Pertanian
3. MAS
4.RHB bank
5.MBSB
The above lists are not meant to be exhaustive but was deliberately highlighted because it share a common thread.All of them suffered losses.There are other losses which I may have excluded for lack of knowledge.
Since most EPF contributors are from the private sectors and govt servants do not contribute because of their pension schemes, it would be fair to say that90% of all contributors are derived from non malays.If that is the case why no non malays are appointed to the board and why no non malay CEO is appointed to manage EPF.?
For so long now the govt have treated EPF as a GLC and have appointed its cronies to manage EPF funds.Many of its dealings have been shady and non transparent and majority of the dubious investments have ended in losses.If a due diligence assignment were to be taken now there is no doubt that EPF would be insolvent.Its investment in the property company of MBSB alone in the 80s brought losses of nearly $1billion.How many of EPF's profitable investment would be required to offset this loss?
There need to be an investigation by an impartial body to determine why EPF have now become so irresponsible.Employees hard earned savings should rightly be invested in gilt-edged shares and govt securities and bonds which have a secure albeit lower rate of return.The guardian of EPF have no right to be adventurous and invest in speculative and risky ventures where there is a risk of failure no matter how miniscule.Now that it has taken the risky route and the investment have ended in losses may we ask who is going to be responsible?.
The govt cannot continue this present lackadiscal course and hope to recover its present losses from future investments.At some point in time we may want to find out how EPF is goingto pay its divdends when the majority of its investments have ended in losses.Most GLC are not professionally managed and as a result most of them have suffered substantial losses.The govt should not treat EPF as a GLC.It should appoint professionals to manage EPF in a transparent manner devoid of any speculative and risky venture.To do so would be at their own peril because the livelihoods and future well being of millions of contributors may very well depend on the success of EPF's investment strategy.