VALUECAP: Furious debate in Parliament - malaysiakini

By Debra Chong
KUALA LUMPUR, Nov 11 — The Federal Government’s pressure on the Employees Provident Fund to inject RM5 billion into Valuecap continued to stir up a flurry of questions from both sides of the divide in the Dewan Rakyat today.

Second Finance Minister Tan Sri Nor Mohamed Yakcop assured members of the House that the RM5 billion loan would not be used to pay off existing loans.

“The RM5.1 billion that needs to be paid by February 2009 is a loan from Valuecap's main shareholders, that is Khazanah, Pension Trust Fund Council (KWAP) and Permodalan Nasional Berhad.

"However, these shareholders have agreed to refinance the loan," Nor Mohamed said in reply to a question from Rembau MP Khairy Jamaluddin.

To a claim by Gombak MP Azmin Ali that the EPF loan to Valuecap was less effective in boosting economic growth than a direct injection into the "real economy" such as is being done in the US and in China, Nor Mohamed replied that the government did not dispute this view and had announced several initiatives towards that goal.

He said that it did not mean the methods were "mutually exclusive" of each other, adding that the EPF, as the single biggest collection of funds in the country amounting to over RM330 billion, must channel its funds towards supporting investment in the real economy.

"This is part of its mandate, for example, through the bonds offered by the corporate sector," said Nor Mohamed.

He stressed that EPF was not an investor in Valuecap and therefore did not hold any equity in the company.

"Valuecap is not for raising the Bursa Malaysia index or to shore up the market," he emphasised.
He clarified that Valuecap was a long-term investment institution and would only invest in shares listed on Bursa Malaysia and not in any foreign portfolio.

"It would be used for investments in companies where the share prices are low but have strong fundamentals and potential," he said, noting that now was a good time for Valuecap to invest.

He assured the House that Valuecap is run by a team of professionals who would provide adequate information on the company so long as it did not jeopardise its investment strategies.
"We will be transparent but whatever we disclose must not jeopardise its investment strategies. We have nothing to hide," he said. -- TMI