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DAP calls for nation-wide protests by the 10.3 million EPF contributors at the outrageous lowest dividend in 40 years of 4.25 per cent when it should be 5.43 per cent and to demand total EPF accountability and transparency for its stewardship of RM203 billion EPF monies Media Statement by Lim Kit Siang (Petaling Jaya,  Saturday): DAP calls for nation-wide protests by the 10.3 million EPF contributors at the outrageous lowest dividend in 40 years of 4.25 per cent for 2002 when it should be 5.43 per cent and to demand total EPF accountability and transparency for its stewardship of RM203 billion EPF monies. The declaration yesterday of the lowest EPF dividend in 40 years has cast a dark shadow on this year's May Day celebrations in less than a fortnight, and the 10.3 million EPF contributors must make clear their disagreement with the Acting Prime Minister, Datuk Seri Abdullah Ahmad Badawi who defended the 4.25 per cent EPF dividend for last year as "the best that can be given under the circumstances". EPF Board Chairman Tan Sri Abdul Halim Ali said that the lowest dividend in 40 years is a reflection of the difficult investment environment of a low interest rate regime for the last four years as well as a lackluster stock market. These are not the only reasons for the outrageous EPF declaration of the lowest dividend in 40 years, as EPF should be able to declare a dividend higher than that of 5% for 2001 as the country had registered a higher economic growth of 4.2 per cent as compared to 0.4 per cent for 2001. In fact, EPF should have been able to declare at least 5.43% for 2002 if not for the high provision of RM2.14 billion for paper losses in equity last year. Abdul Halim said yesterday that for the year under review, the EPF required RM1.82 billion to pay a one per cent dividend rate to its 10.3 million members compared with RM1.67 billion in 2001. If EPF did not have to set aside RM2.14 billion for paper losses in equity and this amount could be released for the declaration of dividend, the 10.3 million EPF contributors would be able to get a dividend of 5.43 per cent - higher than the 5 per cent dividend for 2001. The EPF Chairman gave no details nor any explanation as to why the EPF had to make the higher provision of RM2.14 billion for paper losses in equity, except for the technical explanation that it is "an additional prudent measure in line with international accounting principles". The 10.3 million EPF contributors have no quarrel with the "additional prudent measure" of higher provision for losses in line with international accounting principles, but they definitely have the right to know why the EPF had been so imprudent as to invest in equities which resulted in such multi-billion ringgit losses dragging down the EPF dividend to the lowest level in four decades - together with the full list of the investments on the equities which had gone bad, their identities, the dates, volume and cost of the investments, and the losses incurred. I remember that whenever I had raised these dubious EPF investments and their losses in the previous Parliament, they were invariably dismissed by the Finance Minister and his subordinates as mere "paper losses" and that there was nothing to worry! Now the chickens of these "paper losses" have come home to roost, depressing the EPF dividend for last year to 4.25 per cent when it should be at least 5.43 per cent. Why should the 10.3 million EPF contributors now have to pay with hard-earned cash from their life-savings for what Barisan Nasional Ministers and leaders had claimed were mere "paper losses" from dubious EPF investments? The EPF Chairman , Board and Investment Panel had not been fully frank, accountable and transparent as to the total amount of "paper losses" in equity which had been incurred by EPF. The EPF Board and management had not denied published reports that EPF had been hit by a RM10 billion "paper loss" in equities and that it had been camouflaging these losses in its accounts. EPF should clarify whether these colossal losses are to be written off in the next five years, and whether it would depress EPF dividend by more than one per cent every year for this period as a result. The 10.3 billion EPF contributors are entitled to demand that the EPF come clean on the RM10 billion paper losses in equity and to give a full detailed account. Only four days ago, I had asked as to why there is the longest delay in 50 years to announce the lowest EPF dividend in 40 years, as in the past half a century, the EPF dividend for the previous year would normally be announced in February, and only on rare occasions in March, but never as late as April. Was Abdullah, the Acting Finance Minister, waiting for the return of Datuk Seri Dr. Mahathir Mohamad to his duties as Finance Minister for the bad news to be made public or had he directed the EPF Board to reconsider its decision on the lowest dividend in 40 years, demanding a full public accountability and transparency to keep the trust of the 10.3 million EPF contributors? It would appear that there could be another reason for the long delay in announcing the EPF dividend for last year - until after the Dewan Rakyat meeting so that it would not become an issue in the recent meeting of Parliament! The Cabinet on Wednesday must demonstrate its concern at the lowest EPF dividend in 40 years, and decide on at least five measures, viz: a full and satisfactory explanation for the EPF declaring the lowest dividend in 40 ears to convince the 10.3 million EPF contributors that this was not because of mismanagement, imprudent equity investments, bad loan decisions or bail-out operations gone wrong; amendment of the 1991 EPF Act to allow for direct representation of EPF contributors on the EPF Board and EPF Investment Panel; a new EPF policy on accountability and transparency, as making public its shares dealings in the stock market and beneficiaries of its loans; a mechanism for interaction between the 10.3 million EPF contributors and the EPF Board, Management and Investment Panel; and "green light" for establishment of an EPF Contributors' Association. The 10.3 million EPF contributors on their part should organize themselves to mobilize nation-wide support for greater accountability and transparency of the EPF stewardship of the RM203 billion of EPF investments. Bringing the EPF to full account of the 10.3 million EPF contributors should be the theme of the 2003 May Day. (19/4/2003) * Lim Kit Siang, DAP National Chairman