I wish to refer to the coverage in Malaysiakini with regard to the Auditor-General's Report 2012 Series 1 which has been tabled in Parliament on April 7, 2014.

Let me take this opportunity to thank Malaysiakini for reporting on the issues highlighted in my report.
 
However, I would like to draw to your attention on the report made by your staff, Aidila Razak, with regard to the Employees Provident Fund (EPF) bearing the headline: ‘Alarm raised over EPF investments abroad’.
 
'It was reported that the Auditor-General Ambrin Buang has urged the parliamentary Public Accounts Committee (PAC) to look into the rising investments abroad by EPF, particular in real estates...'

"He wants to know what the investments are for and how they are derived, and whether they are risky or not and if we can get our money back. There might even be elements of corruption. We don't know."
 
(Editor’s note: This quote above is by PAC chairperson Nur Jazlan Mohamed.)
 
From this report, it would appear that I am dissatisfied with the weaknesses in EPF investments abroad and as such EPF is to be hauled up by the PAC to explain on the investments.

I strongly disagree with the report by Aidila Razak as I have not at any point of the time at my meetings and discussions with the PAC members mentioned my dissatisfaction with EPF investments.
 
This is obviously inaccurate reporting and unbecoming to report that alarm be raised over EPF investments abroad.
 
In fact, if you care to go through my report on EPF, I have accurately praised and commended EPF for the profitable ways in managing its overseas real estate investments.
 
I have also stated in my report that the EPF's gross income on real estate investment rose by 91 percent to RM1.14 billion in 2013, compared with RM563 million in 2012.

For your information, this good performance by EPF was actually highlighted by many newspapers, such as The Star, Utusan Malaysia, Berita Harian, The Malaysian Insider and many more.
 
As we all know, EPF is one of the government agencies where public interest is top priority and public confidence should not be eroded with such mischievous reporting by Malaysiakini.

As such, I urge and trust your goodself will make the necessary corrections/amendments to your report.
 
I look forward to your response and thank you for your anticipated cooperation on this matter.

Should you have any question or concern regarding this matter, please contact Ms Ong.

(Ambrin Buang is auditor-general.)


Editor's note: The quote in contention by the auditor-general refers to a direct statement given by PAC chairperson Nur Jazlan Mohamed to members of the press on Monday.
 
As such Malaysiakini defends our report. The transcript of the exchange between Nur Jazlan and reporters is reproduced below.

Nur Jazlan: Saya juga nak sebut mengenai Kumpulan Wang Simpanan Pekerja (EPF). Jabatan Audit Negara mengadakan audit atas EPF, melihat pelaburan luar negara oleh EPF. Dan secara rambangnya, laporan tersebut adalah baik.

Pelaburan dari EPF memberi pulangan yang secukupnya dan Jabatan Audit Negara mendapati pelaburan tersebut telah meningkat dari tahun ke tahun.

Jadi Ketua Audit Negara telah memaklumkan pada Jawatankuasa Kira-kira Wang Negara (PAC) bahawa PAC juga harus melihat.

Walaupun prestasi pelaburan luar negara baik tapi memandangkan jumlahnya besar dan bertambah besar dari tahun ke tahun, mungkin PAC harus melihat atau mendapat penjelasan dari EPF mengenai perancangan mereka dan juga apakah langkah-langkah yang akan diambil untuk mengurangkan risiko kerugian.

Jadi isu ini kita panggil atas kepentingan rakyat untuk beri penjelasan ke atas aktiviti mereka dalam pelaburan antarabangsa.
 
Reporter: What is the value of international investments?

Property investment itself, RM14.36 billion. Total investment overseas especially property, one component is RM14.36 billion which is 7.9 percent of the total investment. So it is giving good returns, as at 2013.

Total investment was RM14.36 billion... let me get the figure right. (Looks at slides provided by Audit Department)

Under this slide, it says, 'KWSP telah membuat laporan hartanah luar negara di United Kingdom, Australia, Singapura dan Eropah dengan pelaburan berjumlah RM6.46 billion.'

That is the total amount. The balance is others.

Earlier, I mentioned RM14 billion, that's the total amount. RM6 billion is property. Other investments are like infrastructure projects.

Can I correct this? RM14 billion is total investments, domestic and international. Sorry we had a long meeting, and you're asking for details. (laughs).

RM6.46 billion is property investments overseas. Australia, United Kingdom, Singapore and Europe.

The others are other sectors, domestic property and infrastructure. That is the breakdown we are given. So infrastructure may have been invested overseas. So we don't have the breakdown for that.

What is the issue with international investments?

Very simple. It is beyond the supervision of the Jabatan Audit Negara.

So the auditor general wants basically to know what these investments are out for, how these investments are derived, whether these are good investments or not, whether these investments are risky or not, you know, whether we can get our money back, you know?

And also it might be an element of corruption there we don't know, because it is outside the country.

To clarify, the income received from the overseas investment, is it 7.9 percent?

That is for the total investment. Sorry about that.

The Jabatan Audit Negara cannot supervise overseas investment?

The money goes overseas. What I mean is, it must have good justification to invest overseas because this money leaves the country.

Once it leaves the country, it limits control on the funds. How can we recover back the money if the investment is lost?

These are the issues that (are) good for people to know how the EPF does the investment overseas.

What's the investment policy, what's the risk-taking policy, what's the governance used to administer that investment, what checks and balances are being done in this investment?

You said that international investment is beyond supervision of JAN.

If it is in the country, therefore it is easier for us to control, you know for us to get information on any investments within the borders of the country.

Once the investment is outside the country, then you have to get cooperation from banks, get cooperation from financial consultants, which will be foreign. it becomes, you know, quite a problem for the JAN to...

Is this wrong (for EPF to invest more and more overseas)?

No, it's not. It's not beyond our supervision.

What I'm saying is we want to tighten any loopholes in terms of overseas investments because once investments are made overseas, it's beyond the control of our own regulators, therefore it is difficult for us to get cooperation from people involved.

So this is what the AG wants the PAC to...

In case something goes wrong, yeah? Let me qualify that.

So they want the PAC to supervise so that the loopholes...

Yeah, in case something goes wrong.

By calling EPF here, by them telling us how they govern these investments etc, what measures they put in to mitigate risks, it will give comfort to the PAC and our report will give comfort to general public that their investments overseas is being well-managed by EPF. I think there is nothing wrong with that.

I mean, we also want to highlight the successes of government-linked organisations in managing people's money. Even outside of the country's borders.

Will you tell EPF how to invest?

No, they have their own board. They have their own policies. Our job is just to find out information for the people to know more about how the running of EPF is.

2012 compared to 2013, overseas investments, has there been a spike?

Yeah, it has increased by 10 percent.

So if they have done well before, and they are increasing the investment, it's a success story for EPF as an organisation.

We are not looking solely at faults of government department and organisations. We also want to highlight the successes and the good governance that has been used in all these organisations.

If the rise last year was 10 percent, what was it in the previous years? Smaller amount?

We have only been given from 2012 to 2013.