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EPF Chairman Abdul Halim should clarify whether it is true that EPF is preparing to declare an even lower dividend of below 4 per cent for this year

Media Statement
by Lim Kit Siang

(Petaling Jaya,  Sunday): Employees Provident Fund (EPF) Board Chairman, Tan Sri Abdul Halim Ali should clarify whether it is true that for this year, EPF is preparing to declare an even lower dividend than 4.25 per cent for 2002 announced two days ago - well below 4 per cent.

This shocking revelation was made yesterday by the Malaysian Trades Union Congress (MTUC) president, Datuk Zainal Rampak, who said that as a member of the EPF Board he had been told that the EPF dividend for this year would be lower than 4 per cent. (Nanyang Siang Pau)

If the EPF is heading back towards the fifties when the EPF dividend was at the statutory minimum of 2.5 per cent, then it is not just Zainal but the entire 10.3 million EPF contributors who should be forewarned and given a chance to decide whether they want EPF to continue in its present form and structure.

The 4.25 per cent EPF dividend last year is shocking and outrageous but what is even more shocking and outrageous is that the Finance Ministry could give its approval for such a unjustifiably low dividend without any demand for a total shake-up of the EPF management and a new EPF policy of full transparency to explain how EPF could have incurred losses running into tens of billions of ringgit causing the plunge in the EPF dividend.

Acting Prime Minister, Datuk Seri Abdullah Ahmad Badawi, in his capacity as Acting Finance Minister, should make a ministerial statement in the Dewan Negara tomorrow to explain to the country why the Finance Ministry is satisfied that the 4.25 per cent EPF dividend for last year was "the best that can be given in the circumstances", what measures the Finance Ministry has taken to ensure that the 10.3 million EPF contributors do not have to pay with their hard-earned life-savings the RM10 billion "paper losses" incurred by EPF as a result of imprudent and reckless equity investments and that the EPF dividend this year would not plunge below 4 per cent?

DAP is absolutely shocked and outraged by the 4.25 per cent EPF dividend for last year as it should be much higher than the 5 per cent declared for 2001, as last year saw a higher national economic growth of 4.2 per cent as compared to 0.4 per cent for 2001.

DAP will organize a public forum on "Lowest dividend in 40 years - what is the future of EPF" in Kuala Lumpur in conjunction with this year's May Day in Kuala Lumpur on Tuesday, 29th April 2003, and among the speakers to be invited to be panelists are:

  1. Acting Finance Minister, Datuk Seri Abdullah Ahmad Badawi, or his representative to explain how the Finance Ministry could give approval for the 4.25 EPF dividend;

  2. EPF Chairman Tan Sri Abdul Halim Ali or his representative to justify the declaration of the lowest dividend in 40 years;

  3. MTUC President Zainal Rampak;

  4. Chairman of the protem committee of the EPF Contributors' Association, G. Rajasekaran, who is also the MTUC secretary-general

  5. Representatives from trade unions, consumer groups and public interest associations.

Zainal Rampak's position on the EPF dividend is most invidious, as he is on the one hand a member of the EPF Board and on the other MTUC president calling for nation-wide picket to voice dissatisfaction over the lowest EPF dividend in 40 years.

Yesterday, he gave one instance of the mismanagement of the EPF, the RM1 billion loss in investments through its subsidiary, Malaysian Building Society Bhd, (MBSB).

Why is Zainal referring only to the case of the MBSB which lost RM1 billion and not to the tens of billions of ringgit of losses incurred by EPF as a result of imprudent investments in the shares market and disbursements of mega-loans? Why should the billions of ringgit of EPF losses from bad management be passed down to the innocent EPF contributors in lower dividends than they are entitled to?

IF Zainal is to lead a nation-wide MTUC protest campaign against the EPF's lowest dividend in 40 years, shouldn't he resign first as a member of the EPF Board?

(20/4/2003)

* Lim Kit Siang, DAP National Chairman