Cancel EPF bailout of Time dotCom: Kit Siang
Susan LoonePublished: Mar 19, 2001 2:04 AM | Updated: Jan 29, 2008 10:21 AM
Employee Provident Fund's (EPF) top leadership should convene an emergency meeting to consider how the fund could rescind its participation in the Time dotCom after incurring RM96 million losses in the first week of the company's public debut, an opposition leader said today.
Employee Provident Fund's (EPF) top leadership should convene an emergency meeting to consider how the fund could rescind its participation in the Time dotCom after incurring RM96 million losses in the first week of the company's public debut, an opposition leader said today.
DAP chairperson Lim Kit Siang said that EPF should be the last institution to be involved in a bailout for the sake of the conglomerate Renong and its chief executive officer Halim Saad.
He added that despite Time dotCom "making double history" as the country's biggest offering as well as the "biggest flop" when it was under-subscribed by 75 percent, Halim was "laughing all the way to the bank" as he had ended up with RM900 million.
"EPF should demand that Halim Saad reimburse the fund for the RM96.29 million losses suffered in the first week of Time dotCom's public debut," said Lim.
"Under no circumstances should any restructuring, retiring and bailout of Halim Saad or Renong's debts be at the expense of the 9.7 million EPF contributors," he added.
Financial crisis
Last Friday, EPF chairman Abdul Halim Ali denied that EPF had bought up any unsubscribed portion of the initial public offering (IPO) of Time dotCom Bhd.
Halim clarified that in 1996, EPF had approved a short-term loan of RM500 million at an interest rate of nine percent to Time Telecommunications Holdings, the telecommunications arm of Time Engineering Bhd.
He said the loan was secured by a corporate guarantee and an undertaking that part of proceeds of the impending IPO of Time dotCom Bhd were to be assigned to the EPF.
However, he said, the 1997 regional financial crisis affected the repayment schedule on the loan for which the tenure was 12 months or the IPO date, whichever was earlier.
Lim said that although Halim had tried to explain the circumstances for EPF's acquisition of the Time dotCom shares, he could not absolve or extenuate the "colossal misjudgment" of EPF in taking up any portion of the Time dotCom IPO.
"The issue at stake is whether one person, Halim Saad, should be allowed to cause the losses of some 9.7 million EPF contributors, or the staggering and astronomical losses of three other institutions, EPF, Penchant Trust Fund and Danaharta," said Lim.
A shame
Lim also expressed his disappointment in Malaysian Trades Union Congress president Zainal Rampak, Cuepacs president, N. Siva Subramaniam and four other trade union representatives who sit on the EPF board as they failed to explain why they had allowed EPF to misuse its funds in the Time dotCom IPO bailout.
"It is also a shame that not a single Barisan Nasional minister, member of parliament or leader has said a single word in the past week to show outrage and condemnation of the scandalous use of government-linked funds and agencies for the Time dotCom IPO bailout," said Lim.
Lim called on every BN MP taking part in the policy debate beginning in Parliament today to speak out against the "scandal".
Lim also said that according to Malaysian Issuing House Sdn Bhd (MIH), which handled the applications for the Time dotCom IPO, a total of 572 million Time dotCom shares were issued at RM3.30 apiece for the IPO, which is part of the restructuring exercise of the Time Engineering group. Applications were received for only 142.86 million shares, or 25 percent of the total made available for public subscription.
Of the total shares issued, 343 million shares were allocated for the public, eligible employees of the Time Group and eligible dealers of Time Wireless Sdn Bhd, and 144.54 million for entitled shareholders of Time Engineering.
According to MIH, 14,558 applications for 29.738 million shares were received in respect of the category of shares made available to the Malaysian public, eligible employees and dealers. This represented a subscription rate of 8.6 percent.
MIH said the share registrars had reported that applications for 28.96 million shares had been received in respect of the restricted offer for sale, for which 144.539 million shares had been allotted. The take-up rate in this category was 20 percent.
It said the placement of 84.15 million new ordinary shares and ordinary shares to specific investors and a turnkey contractor of Time Wireless had been successfully concluded.
Barge pole
Lim said two stark facts stood out from these figures.
Firstly, the revelation from the MIH that if the placement of 84.15 million new ordinary shares and ordinary shares to specific investors and a turnkey contractor of Time Wireless is excluded from the subscriptions received, the take-up for Time dotCom's IPO would be only about 12 percent.
Secondly, excluding Time dotCom shares that were privately placed or subject to restricted offer for sale, individual investors applied for only 29.738 million shares or a mere 5.2 percent of the 572 million shares offered.
"When private and corporate investors fight shy of the Time dotCom IPO, as evidenced by the high rejection rate of 80 percent of the restricted offer for sale, why did the EPF act like 'fools who rush in where angels fear to tread?' asked Lim.
"Did the EPF investment panel act judiciously and independently when it decided to commit RM269.28 million of EPF funds for 3.22 per cent of Time dotCom shares based on the criteria of security, liquidity and yield - when every prudent investor was keeping a 10-feet barge pole distance?" he added.
He said if the answer was 'yes', then there was "something very wrong" with the judgement, competence and professionalism of the EPF Investment Panel, the EPF Board and their professional advisers and action should be taken immediately to revamp and replace them as they have become a threat to the safety and quality of the RM181 billion which made up EPF monies.
"I do not believe that the EPF Investment Panel and its advisers were able to exercise independent and impartial judgement with regard to the use of the EPF monies in the Time dotCom IPO bailout, which would mean a violation of the statutory duties of the EPF and an unlawful investment of EPF monies," said Lim.
DAP chairperson Lim Kit Siang said that EPF should be the last institution to be involved in a bailout for the sake of the conglomerate Renong and its chief executive officer Halim Saad.
He added that despite Time dotCom "making double history" as the country's biggest offering as well as the "biggest flop" when it was under-subscribed by 75 percent, Halim was "laughing all the way to the bank" as he had ended up with RM900 million.
"Under no circumstances should any restructuring, retiring and bailout of Halim Saad or Renong's debts be at the expense of the 9.7 million EPF contributors," he added.
Financial crisis
Last Friday, EPF chairman Abdul Halim Ali denied that EPF had bought up any unsubscribed portion of the initial public offering (IPO) of Time dotCom Bhd.
Halim clarified that in 1996, EPF had approved a short-term loan of RM500 million at an interest rate of nine percent to Time Telecommunications Holdings, the telecommunications arm of Time Engineering Bhd.
He said the loan was secured by a corporate guarantee and an undertaking that part of proceeds of the impending IPO of Time dotCom Bhd were to be assigned to the EPF.
However, he said, the 1997 regional financial crisis affected the repayment schedule on the loan for which the tenure was 12 months or the IPO date, whichever was earlier.
Lim said that although Halim had tried to explain the circumstances for EPF's acquisition of the Time dotCom shares, he could not absolve or extenuate the "colossal misjudgment" of EPF in taking up any portion of the Time dotCom IPO.
"The issue at stake is whether one person, Halim Saad, should be allowed to cause the losses of some 9.7 million EPF contributors, or the staggering and astronomical losses of three other institutions, EPF, Penchant Trust Fund and Danaharta," said Lim.
A shame
Lim also expressed his disappointment in Malaysian Trades Union Congress president Zainal Rampak, Cuepacs president, N. Siva Subramaniam and four other trade union representatives who sit on the EPF board as they failed to explain why they had allowed EPF to misuse its funds in the Time dotCom IPO bailout.
"It is also a shame that not a single Barisan Nasional minister, member of parliament or leader has said a single word in the past week to show outrage and condemnation of the scandalous use of government-linked funds and agencies for the Time dotCom IPO bailout," said Lim.
Lim called on every BN MP taking part in the policy debate beginning in Parliament today to speak out against the "scandal".
Lim also said that according to Malaysian Issuing House Sdn Bhd (MIH), which handled the applications for the Time dotCom IPO, a total of 572 million Time dotCom shares were issued at RM3.30 apiece for the IPO, which is part of the restructuring exercise of the Time Engineering group. Applications were received for only 142.86 million shares, or 25 percent of the total made available for public subscription.
Of the total shares issued, 343 million shares were allocated for the public, eligible employees of the Time Group and eligible dealers of Time Wireless Sdn Bhd, and 144.54 million for entitled shareholders of Time Engineering.
According to MIH, 14,558 applications for 29.738 million shares were received in respect of the category of shares made available to the Malaysian public, eligible employees and dealers. This represented a subscription rate of 8.6 percent.
MIH said the share registrars had reported that applications for 28.96 million shares had been received in respect of the restricted offer for sale, for which 144.539 million shares had been allotted. The take-up rate in this category was 20 percent.
It said the placement of 84.15 million new ordinary shares and ordinary shares to specific investors and a turnkey contractor of Time Wireless had been successfully concluded.
Barge pole
Lim said two stark facts stood out from these figures.
Firstly, the revelation from the MIH that if the placement of 84.15 million new ordinary shares and ordinary shares to specific investors and a turnkey contractor of Time Wireless is excluded from the subscriptions received, the take-up for Time dotCom's IPO would be only about 12 percent.
Secondly, excluding Time dotCom shares that were privately placed or subject to restricted offer for sale, individual investors applied for only 29.738 million shares or a mere 5.2 percent of the 572 million shares offered.
"When private and corporate investors fight shy of the Time dotCom IPO, as evidenced by the high rejection rate of 80 percent of the restricted offer for sale, why did the EPF act like 'fools who rush in where angels fear to tread?' asked Lim.
"Did the EPF investment panel act judiciously and independently when it decided to commit RM269.28 million of EPF funds for 3.22 per cent of Time dotCom shares based on the criteria of security, liquidity and yield - when every prudent investor was keeping a 10-feet barge pole distance?" he added.
He said if the answer was 'yes', then there was "something very wrong" with the judgement, competence and professionalism of the EPF Investment Panel, the EPF Board and their professional advisers and action should be taken immediately to revamp and replace them as they have become a threat to the safety and quality of the RM181 billion which made up EPF monies.
"I do not believe that the EPF Investment Panel and its advisers were able to exercise independent and impartial judgement with regard to the use of the EPF monies in the Time dotCom IPO bailout, which would mean a violation of the statutory duties of the EPF and an unlawful investment of EPF monies," said Lim.
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