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The Employees Provident Fund (EPF) Must Answer Why It Has Failed To Remove The 33 Trust Fund Management Institutions That Lost RM 600 Million From The EPF Panel To Protect EPF Members Investing In Unit Trust Funds Since 1966.

 


Press Statement

by Lim Guan Eng


(Petaling Jaya, Friday): DAP regrets the failure of EPF to act immedidately on the the poor performance of trust fund management institutions resulting in the value of those investing in unit trust funds dropping by RM 600 million from the initial value in investments of RM 9.76 billion when it was first introduced in 1996 to RM 9.15 billion in December 2005. 33 trust fund management institutions(TFD) out of the 42 TFD appointed or 78% recorded negative returns.

Such poor performance is shocking and EPF must answer why it has failed to remove the 33 trust fund management institutions that lost RM 600 million from the EPF Panel to protect EPF members investing in unit trust funds since 1966. To allow the loss-making TFDs to continue to manage EPF membersí funds is most irresponsible, unethical and a complete breach of EPF statutory obligation to protect the interests of its members.

 

DAP calls for the resignation of the EPF Investment Panel for their unprofessional conduct in not complying with due diligence  requirements by appointing and continuing to retain TFDs that are non-performing. EPF must account to the 5.35 million active EPF members out of a total 8 million members the conditions enabling TFDs to be appointed, why they are not stringent enough and most important of all their failure to remove the loss-making TFDs.

 

EPF should sack the 33 and retain the 9 TFDs with the promise that any loss-making TFDs will be sacked for giving negative returns. Only by doing so can EPF not only protect the interests of its members but also shock the TFDs to be serious in their investments and ensure a profitable return.

 

To continue to allow members making maximum withdrawals Of RM 50,000 to invest in any of the 33 TFDs shows not only irresponsibility and unprofessionalism but lack of integrity and moral credibility in the whole management process. Reasons must be given why losses were made whether due to bad or reckless investment decisions or even other unhealthy causes.

 

EPF chairman Tan Sri Abdul Halim Ali must conduct a complete revamp not only amongst the fund management institutions to tighten the process, procedures and management of investment risks but also in EPF itself to ensure that such losses do not recur. Not only non-performing TFDs must be removed, those non-performing officials of EPF who cause losses to membersí investment must also be taken action against.

 

(11/08/2006)      


* Lim Guan Eng,  Secretary-General of DAP

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