Now, this EPF foray to buy UBG’s stake in RHB has got me very, very nervous. I wonder whether the EPF’s “lots of funds” (per PM AAB) will remain intact sufficiently long enough for me to qualify to withdraw all my balance before the EPF goes belly-up. I dont mean EPF will go “belly-up” as in folding up as a business would do, but the first signs will be when the Govt starts putting feelers out that it will discard the lumpsum withdrawal at 55 years to something like, say, a compulsory lifetime monthly payment (call it “pension” for all members, till death, and only then the balance will be distributed to the contributor’s beneficiaries as per nomination form (not according to the deceased contributor’s will)). There is already such an annuity option available for those who opt for it, but when the Govt make it compulsory of contributors, it’s the signal for all contributors to be worried…. VERY, VERY worried.

There is another way that I find most effective when dealing with the gomen and other authorities, including banks.
When writing to them for whatever reasons, always remember the magic of ‘c/c’ ie Carbon Copy.
Yes, for your own success sake in double quick time, c/c to some authorities higher to the entity you are communicating:

Eg
When writing to a bank, c/c Bank Negara
When writing to a school, c/c Education Dept
When writing to EPF, c/c BNM?PM’s Dept?
When writing to Semi Value, c/c AAB
Get it?

And guess what? You don’t really have to sent the hard copy!! Do you think they will take a chance that you didn’t really sent the c/c?? No Sirrreeeeee. You not only get quick action in double quick time, you get their cooperation to act in your favour too!

Now, who should I c/c this e-mail to??

He was quoted in MalaysiaToday Blog to have said earlier after attending a briefing at Bank Negara’s board of directors quarterly meeting in Kuala Lumpur, “It (EPF) has a lot of funds. Don’t tell me it wants to just save it. If there are investments which the EPF considers to be beneficial and profitable after giving due consideration, it is a decision for it to make. I will not stop it,” he added.

It is an indirect way of showing where his sympathy lies. Just like the response in relation to allegations against the deputy minister of Internal Security - those innocent have nothing to worry.

The Govt should not show favour in a commercial deal between competitive bidders which are both local institutions. Govt is key arbiter since Central bank’s consent to bid is imperative.

However it is apparent that Pak Lah’s administration is happier with EPF’s success over Eon. That is my and many others’ perception anyway. What strategic political or economic considerations are in play?

Eon Capital is already in and knows about banking business. The board of EON Capital Berhad is capable. * It includes Rin Kei Mei, said to be known to and highly regarded by previous PM, Dr Mahathir. What’s the beef?

EPF, on the other hand, may have lots of money but it is supposed to manage prudently trust monies for us and should put them in safe investments.

How could it be said that investing in banking business is safe and profitable relative to the investment costs ?

In Malaysia’s experience, so many banks failed and needed bail out under cover of merger. To cite some cases, Tan Koon Suan’s failed Supreme Finance Bhd with acquired deficit of 6 to 700 million was taken over by Maybank group in early 1980s. Failed United Asian Bank and then Bank Bumiputra was taken over by Bank of Commerce which afterwards integrated with CIMB.

When Utama Banking Group Bhd (UBG) (associated with our Sarawak Taiko) took over RHB, it found a mess and sued the RHB’s top officers for breach of directors duties.

The history of RHB Bank itself was earlier founded upon merger with Sime Bank (once United Malayan Banking Corp.) .. .. and in UMBC itself, there was so much of controversy, if one digs back (lending to share speculation activities, the bank controlled by some ex lawyer cum corporate player whose name did not appear in shareholder/director list but however control it through his proxies etc).

Buying into Banking business is prestigious but risky (unless very well managed by hands on CEO cum substantial owner like in case of Public Bank).

Whatever profits made over many loans can be wiped out by a few mega huge and bad loans.

When you pay for bank’s shares, can the acquirer’s due diligence really pin down and estimate the banks assets accurately whether they will turn bad a year or two down the road?

EPF must have a lot of faith in credit culture and integrity of our bank officers to buy into a bank.

There are lot of factors that cannot be controlled by even bank management.

If cyclical property market cools drastically, (Non Performing Loan) NPL rates will loom exponentially.

Singapore’s DBS bought into Thai Danu Bank in Thailand, exited after a huge loss of over SG$ 1 billion due to sudden ballooning of NPLs.

How can anyone say Banking especially in our environment is not a risky business? How can anyone say that it’s ok or prudent for EPF, a trust institution, to take over substantial control of a bank?

EPF’s Investment Panel may have grandiloquent idea of doing banking. But how can the government be seen favouring EPF’s bid?

I bet there are some striong political considerations in play behind the govt being more predisposed toward EPF than EON ’s bid. But it may not be to our interest when EPF is involved.

And Haslinda, all’s well that ends well for you too. Wish you every success in yr studies. You sound every bit bright, persistent and assertive. Kudos to you. Hope you do something too to help yr other friends in whatever manner of distress they may be in.

HOWEVER, I can’t help feeling very, very sad, nothwithstanding this small success - that the things happening in MALAYSIA, have become the butt of many a painful joke. The PM has to interfere personally to get a university lecturer, Terrence Gomez, ‘non-pay leave’ for a UN appointment!!! Then the Opposition Leader, YB LKS, has to plunge into the EPF torrents to save a girl in financial distress!! And so on….

Now you tell me - are there no better things in the country for the top 1 and 2 persons to do?

Oh yes, in my calculations, YB LKS is the NO.2 public servant. AAB is No. 1. More often, it’s the other way around. Sorrylah AAB.

Naguib - oh, Naguib is nowhere to be found. I don’t know who he serves!! But who will save Razak Baginda, eh?