Valuecap should reveal accounts before getting RM5b

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The government wants to inject RM5 billion into Valuecap Sdn Bhd to “invest” in the stock market. This money is supposed to be borrowed from the EPF (your retirement money). This is the same EPF that has lent RM3 billion to the Bakun Dam developer.

Before the RM5 billion is channelled to Valuecap, let’s make public Valuecap’s detailed financial statements and look at how it has performed relative to the KLCI index since 2003, when it began operations. Since it is supposed to be in the black, there should not be any objections to this. Show us which counters it has invested in. That would only be fair – if they want to use our money. Without transparency, how can we hope to inspire confidence?

Valuecap is a fund management firm established in 2002 to invest in the stock market. It has been described as “the brainchild of Second Finance Minister Nor Mohamed Yakcop”.

It is jointly owned by:

  • Khazanah Nasional Bhd, the government’s investment arm,
  • Permodalan Nasional Bhd, and
  • Retirement Fund (Incorporated) or KWAP, a statutory body established on 1 March 2007 under the Retirement Fund Act 2007 (which replaces the repealed Pensions Trust Fund Act 1991). KWAP was set up to assist the Federal Government in funding its liability of pension payouts. Its investment strategy is 30 per cent (plus/minus 10 per cent) in equity investments and a similar percentage in fixed investments.

The other big question: why use EPF funds, which is public money held in trust? Surely, this is not the time to dabble in the stock market using public money when conditions are so volatile. Why can’t Khazanah, PNB and KWAP tap into other sources of funds?

Which leads to the other question: what kind of return can the EPF expect to get from its loan to Valuecap and how does that expected return compare with more stable, less risky investments? Speaking of the EPF, we have been told that 20 per cent of its RM330 billion funds has been invested in shares. But how much has been invested in loans for infrastructure projects and other investments with low or questionable returns?

This excerpt from The Edge Daily:

There is little public information on the stocks that Valuecap has invested in. Information on its investments is only known through annual reports of companies they have invested in.

However, based on filings with the Companies Commission of Malaysia, Valuecap is very much in the black despite the bearish stock market. As of Dec 31, 2007 it had total assets worth RM7.56 billion and posted an after-tax profit of RM1.1 billion for the year.

As for returns to its shareholders, it has been reported that since its inception to September 2007, Valuecap had paid out a total of RM135 million in dividends.

Attempts to contact Valuecap or its chief executive officer Sharifatu Laila Syed Ali on the stocks invested were unsuccessful.

Nevertheless, based on industry information obtained by The Edge Financial Daily, Valuecap is believed to have about RM4.9 billion worth of investments in 70 companies currently.

These companies are from a variety of segments and include the YTL Group, the IJM group, Malayan Banking Bhd, Hong Leong Bank Bhd, Public Bank Bhd, Tenaga Nasional Bhd, Malaysian Oxygen Bhd, Amway (M) Holdings Bhd and PLUS Expressways Bhd. The list also shows that Valuecap has interest in Real Estate Investment Trusts (REIT) such as Axis REIT and Quill Capital Trust REIT. (See table)

Meanwhile, an exchange-traded fund launched last January by Valuecap’s wholly owned subsidiary, i-Vcap is feeling the effects of the sharp drop in equity prices.

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aragon

So to all Malays, who are majority in this country, do something .., when thin BN – UMNO suck all your children futures. We non-bumi are already contributing more than 90% to TAXes & EPF into this fund…
– kenntzen

it not right for u to say ‘all malay’ Not all malay support a thing like this , only a few, other are still struggle, think before u spoke, ever we are a same race that doesn’t mean we have a same opinion. think before you act.

Amrit

Look around from Enron, World.Com, Lehman Brothers, Submarine Deal, Eurocopter Deal and ect. Somebody, some group, some directors, some financial controllers, politicians and ect, have walked away with the money.
Later it will be termed in their “Account Ledgers as LOSSES”.
Hello,,,, its common sense if ” somebody loosess, somebody has made it, money does not evaporate into space”.

oneworldmaybenot

Think someone sitting on their brains. Get the economy right lah then it will be reflected in the market. Go use RM5 bil to support prices so foreign or hedge funds can sell out at higher price since nowadays they desperate to repatriate back cash

Cheng Poh Heng

First, EPF moneys are not public money, but belong to Members of the Fund. Secondly, the EPF Board shall be trustee of the Fund. Thirdly, the EPF Board may invest in shares of any public company listed on the stock exchange established in Malaysia… Fourthly, the Board may with the written approval of the Minister, invest moneys belonging to the Fund, inter alia, in any investment outside Malaysia or any other form of investment. The Investment Panel is responsible for matters pertaining to investments of the Fund. The Investment Panel shall be subject to such directions issued by the Board… Read more »

kenntzen

The big giant financial house can collapsed, what the big deal about (local) banks …. in Malaysia, you will not be surprised if more things are being uncovered and more domino efect will follow in our shore soon. As a member of EPF contributor for more than20 years, we see clearly how BN, especially UMNO sucked, our Bangsa Malaysia (Malay, Chinese, Indian and all) money to their benefits. So to all Malays, who are majority in this country, do something .., when thin BN – UMNO suck all your children futures. We non-bumi are already contributing more than 90% to… Read more »

KM

Vote for BN again lah.

Luke Siaw Lu Tiong

Yup. We vote BN to give them mandate to “steal”. If everything is lost. What can you or me do.

Nothing!!!

PlainTruth

Anil got it spot on. ValueCap should publish its performance to date before they go to EPF with their begging bowl.

And why EPF and why not its own shareholders Khazanah and PNB?

Taikohtai

Looks like Valuecap is trying its hands on catching a falling knife! Only thing is that it is using somebody else hands (read EPF) to do so.
I think it should change its name to Novaluecap or Valuecrap.It should not be allowed to play Heads I win, Tails you lose with the retirement money of the rakyat. ON the other hand, if the deal is guaranteed by the BN MPs personally, I am all for it.
Time to put up or shut the **** up, time to put your money where your mouth is.

armouris

beside helicopter deal, PAC should look into this also!!

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Nesh

These Valucap i supposed not only brainchild of 2nd Finance Minister its also looks like investment arm for HIM n the ppl only he will know. Why cant Khazanah use other means of GLC’s instead of Valucap. It (appears like) day time robbery RM5b.

amoker

Smells too fishy with no transparency and high handedness. Both Najib and Yaacob just shrugged off questions and demand that the rakyat agree to their assurance.

casper

At such depress levels, there are now bargains to be had if one takes a stab at holding for the medium term(3-5 years and longer). This window of opportunity allows investors to own stocks once considered too pricy – BAT, DiGi, Public Bank – springs readily to mind. Unfortunately for us all, this multi-billion ringgit fund come into play as political capital (possibly) to prop loss making GLC’s. In this instance, Maybank comes to mind. It is public knowledge the … lunatic decision to buy BII at the most inappropriate time and there is more bad news on the horizon… Read more »

Seattle Screamer

Mavcap and MDeC have previously pumped in some dough and they’re up in arms now…

The story here:
http://star-techcentral.com/tech/story.asp?file=/2008/10/17/technology/20081017183806&sec=technology

What makes the govt think that they can take our money and just lend it to valuecap? isn’t a due diligence in order? the books should definitely be reviewed….This is the people’s money and it sure as hell doesn’t belong to the govt of the day. I reckon anyone who came up with this hair-brained idea should resign from whatever posts he holds.

Andrew

Actually, this is another mega-bailout to prop up both Valuecap’s diminished investments and to prop up the collapsing share values of Bursa Malaysia. The Second FM, the FM and even the PM can call it whatever they want and will. But a rotten carcass by any other name is still a rotten carcass. So too this RM5 billion fund injection is nothing more than a bailout irrespective of what the half-baked BN spin-doctors want to call it. Bailout is a bailout. No need to talk so much anymore. This government has no shame, no conscience and no respect for the… Read more »

Domino

I think the purpose or guideline for EPF investment endeavours needs to be revisited. EPF is supposed to hold the retirement money of the rakyat in trust, safe guard it whle maximise its returns in a conservative way. Right now it has become a cheap and convenient source of fund. Who decides/approves the usage of the money?

Myblog

The only way to get this done is through a public interest litigation, otherwise we can forget about it.

So who is it that will undertake this herculean task of obtaining an injunction and subsequent litigation