1. I am appalled by the joint statement from PAN’s Dr. Dzulkefly Ahmad, PKR YB Wong Chen and DAP’s YB YB Teresa Kok two days ago.
2. They had maliciously claimed that the Employees Provident Fund (EPF) is facing financial difficulties thus declaring a lower dividend rate of 5.7% for 2016 compared to 6.4% the previous year. The three senior politicians also claimed that this was caused by EPF’s investment in 1MDB, which they wrongly claim is worth RM1.72 billion.
3. EPF is not in any financial difficulty. If it was in financial difficulties or made a loss, EPF would not be paying a dividend at all – more so a healthy 5.7% dividend for 2016.
4. As was answered in parliament in May 2015, EPF’s exposure to 1MDB is RM200 million – not RM1.72 billion. This investment is in the 30 years Sukuk issued in the year 2009 and is fully guaranteed by the government.
5. To clarify further, EPF also has exposure of RM1.5 billion in bonds for two Independent Power Producer (IPP) plants – Panglima Power Sdn Bhd (PPSB) and Jimah Energy Ventures Sdn Bhd (JEV). These bonds were subscribed by EPF in the year 2003 and 2005 respectively before 1MDB was founded and are backed by healthy cash-flow.
6. As is widely known, these two IPPs were previously acquired by 1MDB but have since been sold in a deal completed in March 2016, which was part of 1MDB’s rationalization exercise. Hence, these two bonds are no longer associated with 1MDB.
7. All three bonds are fixed income bonds that pays fixed coupons and have never been in default. EPF has not lost a single sen in them.
Additionally, EPF’s remaining RM200 million exposure to 1MDB’s government guaranteed Sukuk is just 0.027% of EPF’s total assets of RM731 billion.
8. Therefore, for the three opposition leaders to claim that EPF is in financial difficulties or that 1MDB had caused losses to EPF is wrong and malicious.
9. As current or former Members of Parliament, the three opposition leaders have failed their sworn duties to be honest to the people when they made such ridiculous claims in their joint statement. They must not repeat this in future.
10. Given historical dividends since the year 2000, the current global and regional economic situation and the performance of other provident funds and mutual funds in the region, EPF’s 5.7% dividend for 2016 is commendable.
11. For the nine years from 2000 to 2008, EPF had recorded an average annual dividend rate of 4.99% whereas from 2009 to 2016, this average had increased to 6.1%.
12. I am confident that with the accelerating GDP growth in the previous two quarters and the recent sharp increases in the Bursa Malaysia index, God-willing, EPF will perform even better for the year 2017.
Abdul Rahman Dahlan
Director of Barisan Nasional Strategic Communications
24 February 2017