(Petaling Jaya, Monday): The Employees Provident Fund (EPF) has announced the appointment of a local consultant to restore contributors’ concerns regarding the fund’s liquidity and safety of contributions.
This is an admission of corporate failure by the EPF Board and its top management to retain the confidence of the 8.2 million EPF members about their stewardship of the RM140 billion EPF funds.
Heads must roll if the EPF leadership and management has reached such a parlous state that a consultant had to be appointed to restore contributors’ concerns on the funds’ liquidity and safety, as this means that the top EPF management and Board have seriously fallen on their most elementary job and responsibility - to manage the EPF funds judiciously in a manner as to maintain the confidence of the contributors.
Why should the EPF spend more money of the 8.2 million EPF contributors to appoint a local consultant to find ways to resolve a crisis of confidence which is solely the creation of the top EPF Management - its refusal to comply with the principles of good corporate governance by taking the contributors into its confidence with regular disclosures with regard to the EPF investment policy and decisions.
In this connection, the EPF contributors are entitled to know whether the EPF decision to appoint a local consultant to brush up its corporate image was taken by the EPF Board, or only by the EPF top management, as EPF Board members have often complained of being kept in the dark about important EPF policy decision-making, as for instance, with regard to the investment decisions of the EPF Investment Panel.
There would be no need for any consultant to restore the EPF members’ confidence if the EPF Board and management had acted in an accountable and transparent manner, as for instance, making use of the Internet to regularly post for public information the investment decisions made by the EPF Investment Panel, including the volume and value of shares purchased with the EPF funds.
How can the appointment of a consultant, for instance, dispel public fears and anxieties that EPF monies are being used as a "captive cash-rich fund" to bail-out troubled crony companies - whether directly or indirectly?
Before the EPF takes a final decision on the appointment of a consultant to restore the contributors’ confidence, the EPF should make public all details about the appointment - who is the consultant, the fees involved and its terms of reference. Even more important, the EPF should listen to the views of the EPF contributors as to whether there should be such an appointment.
It is a sad day for the EPF Board and top management if they need "spin doctors" to project a good public image which in any event does not address the root cause of the crisis of confidence among EPF members.
For instance, can the consultant satisfactorily convince the 8.2 million EPF contributors why the EPF dividend for last year was a 21-year low of 6.7 per cent when the Gross Domestic Product (GDP) growth was still a heathy 7.8 per cent - and what the EPF dividend was going to be like for this year when the GDP growth is projected to be between negative six per cent (the government’s estimate) to -7.5 per cent (the International Monetary Fund’s forecast a week ago)?
(28/12/98)