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| From: DAP MALAYSIA <dap.malaysia@p...> Date: Thu Mar 15, 2001 4:34am Subject: [BUNGARAYA] Time dotCom IPO shortfall - a nest of scandals ------------------------------------------------------------------------- This is the list for the Democratic Action Party of Malaysia. To subscribe, send "subscribe" in email body to <bungaraya-request@l...> ------------------------------------------------------------------------- Media Conference Statement by DAP National Chairman Lim Kit Siang in Penang on Thursday, 15th March 2001: DAP will lead 9.7 million EPF contributors to appear before the over 50 EPF offices in the country to demand accountability on EPF's role in the RM439 million lossses over the bailout of Time dotCom IPO shortfall and the lowest EPF dividend of 6 per cent last year in 25 years =============================================================== Yesterday, the US ratings agency, Moody's Investors Service, which currently has a "Baa2" foreign currency debt rating for Malaysia, said in its annual report that factors inhibiting a rapid rise in Malaysia's foreign currency debt ratings included the "relative slowness of corporate sector reform and its implications for competitiveness over the medium term". Unfortunately, the country is often bombarded with outrageous examples of corporate misgovernance, whether the RM1.79 billion government bailout of Tan Sri Tajudin Ramli's 29.09 per cent of MAS stake through Naluri and the RM6 billion bailout for the two LRT companies, STAR and PUTRA - and the latest outrage is the use of government-linked funds and agencies to bailout the RM1.145 billion Time dotCom initial public offering (IPO) 75% undersubscription shortfall. It is most unfortunate that the Employees Provident Fund (EPF), which manages a fund of the size of RM181 billion and according to EPF Chairman, Tan Sri Abdul Halim Ali, "one of the largest in the world", is in the forefront as an example of bad corporate governance as illustrated by his refusal to comply with the most elementary rules of accountability and transparency to give information on EPF's involvement in the RM1.415 billion bailout for Time dotCom IPO shortfall. Yesterday, I had lodged a police report in Kuala Lumpur based on the The Sun report on Monday that EPF, Kumpulan Wang Amanah Pencen (KWAP) and Pengurusan Danaharta Nasional Bhd were believed to have taken up the RM1.415 billion unsubscribed public portion of the Time dotCom Bhd IPO - which would mean that these three agencies would have suffered an astronomical loss of RM439 million in the first two days of the public debut of Time dotCom as a result of the 31 per cent crash of its IPO price. The use of public funds to bail out the Time dotCom 75% IPO shortfall paying the IPO price of RM3.30 when the market had been quite unanimous in expecting a sharp plunge of its price on its public listing - losing to the tune of RM439 million as a result of a 31 per cent price crash in two days - tantamounts to criminal breach of trust and criminal misapplication of public funds. If EPF had participated in the bailout of the Time dotCom IPO, then the EPF would be doing its worst for the 9.7 million EPF contributors instead of "EPF doing its best for contributors" which was the heading of a letter from the EPF Chairman, Tan Sri Abdul Halim Ali which was published in the Sun on Monday claiming that the EPF's "decision to invest in any project, company or fund, has always been based on the criteria of security, liquidity and yield". Halim would have to explain how from the three considerations of "security, liquidity and yield", EPF can justify taking up the unsubscribed public portion of Time dotCom IPO, when EPF can now buy the Time dotCom shares in the market at 31 per cent discount of the IPO price? If EPF had not participated in the bailout by government-linked funds and agencies of the RM1.415 billion Time dotCom IPO as not to partake in the staggering losses of RM439 million in two days of its public listing, why can't Halim declare so publicly? Halim should be aware that he and other EPF officers and employees are servants of the 9.7 million EPF contributors and trustees of the RM181 billion EPF monies and not lords and masters of this hoard of money as some EPF staff seemed to assume in their rude and crude treatment of EPF contributors who went to the EPF Headquarters in Kuala Lumpur yesterday to demand accountability about the safety and quality of their EPF funds. The principle must be established clearly and without a shadow of doubt that the EPF Board and management must practise not only good corporate governance but must adhere to the principles of accountability and transparency in their relations with the 9.7 million EPF contributors. To establish this principle, DAP and the Barisan Alternative will lead the 9.7 million EPF contributors to appear before the over 50 EPF offices in the country to demand accountability on EPF's role in the RM439 million losses over the bailout of Time dotCom IPO shortfall and the lowest EPF dividend of 6 per cent last year in 25 years. Business Times today in a report "KWAP, Danaharta buy 14pc of Time dotCom for RM1.2b", states: "STATE-RUN pension fund Kumpulan Wang Amanah Pencen (KWAP) and Pengurusan Danaharta Nasional Bhd have spent a total of RM1.17 billion to purchase unsubscribed shares of Time dotCom Bhd, following the public's dismal reception to the company's initial public offering last month. "The two government agencies said in a statement to the Kuala Lumpur Stock Exchange that they purchased the shares at an issue price of RM3.30 a piece under a sub-underwriting arrangement. "KWAP is now a substantial shareholder of Time dotCom, holding some 273.86 million shares or 10.82 per cent of the integrated telecommunications company. "Danaharta, the agency tasked to remove bad loans from the banking system, also has a direct interest of 80.05 million shares that translates into a stake of 3.16 per cent. "Shares of Time dotCom fell a third day to RM2.27 yesterday. "This means that KWAP and Danaharta are sitting on a paper loss of slightly over 31 per cent. "Their combined interests are now valued at about RM803 million based on yesterday's closing price. "Apart from the two agencies, the Government's investment arm Khazanah Nasional Bhd had also acquired 30 per cent of Time dotCom for some RM2.1 billion prior to its listing on Monday." Many questions of burning public interests cry out for answer from this report, including: (1) If KWAP and Danaharta had taken up RM1.17 billion of the unsubscribed public portion of Time dotCom IPO, as to suffer RM362 million losses in the first two days of its public debut, did EPF take up the balance of RM245 million of the Time dotCom IPO incurring a loss of RM77 million in two days? (2) Why had the Pensions Trust Fund (KWAP) decided to be the "white knight" to bail out the Time dotCom IPO, to the extent of using RM904 million of the trust fund to buy 273.86 million Time dotCom shares, incurring an instant loss of RM280 million? I do not know who is the KWAP Chairman but he should show himself and explain why he and the KWAP Board of Management had betrayed the trust of 800,000 public employees in committing RM904 million of the trust funds in the Time dotCom at IPO price which incurred a 31% loss in the first two days of its public debut. KWAP was not established as a fund to bailout crony companies but set up under the Pensions Trust Act 1991 to assume the Government's obligations in meeting the cost of pension and gratuity payments of the public sector. Total resources mobilised by KWAP reached RM15,126 million at end June-2000. It is clearly a gross mismanagement of public funds to invest some six per cent of the trust fund on a counter which all market analysts had declared would nosedive after its public debut. I have asked my office to find out the identities of the officers of the KWAP and to ask for a meeting to find out the reasons why they had jeopardised the pensions of the 800,000 public employees with such atrocious judgement and bad decision-making. If the KWAP Chairman is unprepared to have a meeting and be accountable for his actions, I would lodge a police report against the KWAP for criminal breach trust and criminal misuse of public funds in taking up 273.86 million unsubscribed shares of the Time dotCom IPO and jeopardising the safety and quality of the pension trust fund of 800,000 public employees. (3) It is shocking that Danaharta should be involved in the bailout of the Time dotCom IPO, as this has never been the statutory purpose for which Danaharta was established by Parliament. Danaharta's statutory mission is "to re-energise the financial sector by removing the non-performing loans distractions and to maximise the recovery value of the acquired assets" and clearly not to be a vehicle to bailout failed IPOs of companies. The is clearly another case of gross misuse of powers and misapplication of public funds. Both Danaharta and the Finance Minister, Tun Daim Zainuddin, should explain why Danaharta had embarked on such an illegal operation outside its statutory powers and how the illegal Danaharta acquisition of 80.05 million Time dotCom shares could be undone. (4) The acquisition of 30 per cent of Time dotCom by the Government's investment arm Khazanah Nasional Bhd for some RM2.1 billion prior to its listing on Monday also raises many questions about its propriety, accountability and transparency - which would be dealt with on another occasion. - Lim Kit Siang - |
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| umno's idiotic fund managers |
| Media Statement by DAP National Chairman Lim Kit Siang in Petaling Jaya on Monday, April 16, 2001: BA MPs should demand in Parliament for a full list of RM40 billion EPF loans especially those made after the financial crisis from 1997 to 1999 to ensure that "every sen is safe" as EPF increased loans to corporate borrowers during this period when banks had turned cautious and tightened credit =============================== Barisan Alternative Members of Parliament should demand in the Dewan Rakyat for a full list of RM40 billion EPF loans especially those given out by the EPF after the financial crisis from 1997 to 1999 to ensure that "every sen in EPF is safe" as there had been a dramatic and unaccoutable increase of EPF loans to corporate borrowers during this period when banks had turned cautious and tightened credit. The recent assurance by the Employees Provident Fund (EPF) Chairman Tan Sri Abdul Halim Ali that "Every sen in EPF is safe" is meaningless as he had not been able to give a full and satisfactory explanation on many EPF investments, as for instance: · why EPF lost over RM100 million from its RM269.28 million investment in 81.6 million Time dotCom shares at RM3.30 as the share is hovering between RM1.96 to RM2.10, and there are people who say it is worth even less. · whether the RM181 billion EPF funds had been involved in the final-minutes multi-million ringgit institutional manipulation of the Kuala Lumpur stock exchange (KLSE) through the Big Three "TMT" stocks - Telekom Malaysia Bhd, Malayan Banking Bhd and Tenaga Nasional Bhd - in the past three months; · whether EPF had bought some 3.4 million shares in Maybank costing some RM43 million in the 12 days between March 9 to 27, 2001 incurring a loss of some RM11 million when Maybank fell to below RM10 per share at the end of trading last week. EPF's asset and investment allocation for loans and debentures at the height of the financial crisis in 1997 reached RM33.83 billion or 26.16 per cent of total EPF funds in 1997, RM38.43 billion or 26.58 per cent in 1998, RM39.87 billion or 24.61 per cent in 1999 and RM37.62 billion or 20.77 per cent in 2000 when a decade ago loans only constituted 8.2% of total allocation of EPF funds. Are these EPF loans safe or will they end up like the RM500 million EPF loan to Time Telecommunications Holdings in 1996, forcing EPF to participate in the Time dotCom IPO bailout at terms detrimental to the interests of the EPF contributors? The 9.7 million EPF contributors are entitled to a full and satisfactory explanation for the close to RM40 billion EPF funds allocated for loans and debentures in view of the fact that the government has failed to learn any lesson from the 1997 financial crisis. As University of Malaya associate professor Dr. Edmund Terence Gomez said at the DAP "Bailouts and buyouts - are EPF, Pensions Trust Fund and Public Monies Safe" held in Kuala Lumpur last Monday, financial institutions that are controlled by the government are being used to channel loans to a privileged few who are facing problems in servicing their debts. According to him, 15 corporate groups accounted for 20 percent of Malaysia's entire bank loans during the economic crisis. He said: "Of the RM39 billion loaned by banks for share acquisition, almost 45 percent were given to the individuals. One company, the Umno-linked Renong, had accumulated debts constituting more than five percent of loans in the Malaysian banking system." EPF should report to Parliament all the loans given out to the Renong-associated stable of companies before and after the 1997 financial crisis. - Lim Kit Siang - |
| Pensions Trust Fund - lost another RM44 million in CAHB Media Statement by DAP National Chairman Lim Kit Siang in Petaling Jaya on Wednesday, April 18, 2001: Call on Pensions Trust Fund to explain whether it has incurred some RM44 million losses in acquiring 24.4 million CAHB shares after losing some RM360 million in the Time dotCom IPO fiasco The Pensions Trust Fund (KWAP) should explain whether it has incurred some RM44 million losses in acquiring 24.4 million CAHB shares after losing some RM360 million in the Time dotCom IPO fiasco ========================================================= Yesterday, KWAP declared that it bought 24.4 million shares in Commerce Asset-Holding Berhad (CAHB), the owner of the second largest bank in the country, late last month and is now now a substantial shareholder with a 2.07 per cent stake in its maiden purchase of the parent of Bumiputra-Commerce Bank. Singapore Business Times today report that although KWAP said it acquired the shares on the open market, analysts said KWAP could have purchased some of the shares from substantial shareholders as only 1.2 million CAHB shares changed hands in the market on the transaction date of March 22. Furthermore, only a handful of owners own more than 2 per cent of CAHB. The Singapore Business Times report said: "According to its annual report, the major CAHB shareholders are the Ministry of Finance (16.75 per cent), Khazanah Nasional (15.03 per cent), New Straits Times Press (12.85 per cent), Renong Bhd (12.16 per cent), the Employees Provident Fund (9.3 per cent), Sanwa Bank (4.56 per cent), and Capital Group (2.84 per cent). "The seller or sellers of the shares have yet to disclose their disposals. "But the sellers are not likely to be fellow government agencies like Khazanah or the EPF, which have been mopping up shares of CAHB and other Malaysian companies in the last few months. "It is still not known if the shares had belonged to Renong or NSTP. The two companies have been trying to unload their CAHB stakes in the last two years to pare down their debts. "A dealer said the shares could have come from Capital Group. The US fund manager has disposed of seven million CAHB shares in the last four months, but still owns about 26 million CAHB shares. "KWAP, which manages the country's pension funds for 800,000 retirees, is likely to be sitting on a huge paper loss of almost RM44 million (S$20.9 million) from its investment in CAHB." "The pension fund did not disclose the purchase price, but the shares were worth RM169.4 million based on the market price of RM6.95 on the acquisition date. "CAHB's share price has since eased to RM5.15 yesterday, valuing the Kwap investment at RM125.5 million. "Kwap's recent aggressive streak in the Malaysian bourse has raised eyebrows though. "Last month, Kwap, which comes under the office of Finance Minister Daim Zainuddin, disclosed that it coughed up RM904 million in cash to take up 273.9 million unwanted Time dotCom shares at RM3.30 apiece following its dismal IPO. "Time dotCom, which is part of the Renong stable, closed at RM1.99 yesterday. "And in December, Kwap bought Brunei Investment Agency's entire 70 million shares in national carrier Malaysian Airline System at RM4 apiece. MAS closed at RM2.60 yesterday. Kwap is now sitting on an estimated whopping paper loss of RM500 million from its recent investments in Time dotCom, MAS and CAHB." - Lim Kit Siang - |