Govt to pump extra RM5b into Valuecap

by WYT

First and foremost, I’m just a one of those silient supporters of yours and this is my first time voice up on issue such as the above subject mentioned.

I am really bugged to hear the goverment is pump in additional RM5b into the equity market. I’m not complaint the intention but the general public does not know where the money come from and where the profit goes. I would assume the money is drawed from us, the tax payers and my next question is why in this 5 years since ValueCap setup, there is no news about how is the fund performance and where is the profit earned (from KLCI index 700+ to 1400+ before the US credit crisis kick in) gone? This is not fair to us if we do not know this ValueCap performance.

I do not see the point why injection of additional fund is necessary when there is profit when KLCI climb to 1400 point and it will even be ridiculous if the fund fails to profit during the period and certainly an excuse should they say the gain has been wiped out because of the crisis, then where is our iniatial injection when the fund is being setup up.

This is just my personal opinion of the issue and you may have a different coming. Nonetheless, I hope you can bring this issue up to parliament and question the cabinet. I believe the general public deserve an answer for this ValueCap and an audit maybe good.

  1. #1 by k1980 on Tuesday, 21 October 2008 - 5:44 pm

    //5 years since ValueCap setup, there is no news about how is the fund performance and where is the profit earned//

    Come on, if this ValueCap is making profits, it won’t have to borrow RM5 billion from EPF

  2. #2 by Godfather on Tuesday, 21 October 2008 - 5:52 pm

    The money is to come from the EPF, as confirmed by Najis. There is nothing wrong with supporting our market, just like what most countries in the world are doing right now – but the issue here is transparency. Who decides which counters to support and on what basis ? It would be OK if they apply the funds pro-rata to most of the counters of the KL composite index, but if they only support BN cronies, then we have every reason to cry foul.

  3. #3 by swipenter on Tuesday, 21 October 2008 - 5:59 pm


    Additional Rm5bil to be borrowed from EPF; that is my ,yours and all EPF contributors’ hard earned money.

    You brought up a very good point. How is the performance of ValueCap and what is their track record since inception.

    YB Lim please ask the Finance Minister in the next sitting. All EPF contributors must be dying to find out the performance of ValueCap and where is the money now?

  4. #4 by dawsheng on Tuesday, 21 October 2008 - 6:14 pm

    Valuecap is Sdn Bhd under the Ministry of Finance or private individuals? Or is it under Khazanah, something like GIC or Temasek of Singapore? Obviously this is not a commercial transaction, it was not an investment but a loan, EPF is not a bank. Something is not right.

  5. #5 by Godfather on Tuesday, 21 October 2008 - 6:34 pm

    To get to the bottom of “something is not right”, we would have to get past the OSA, the Sedition Act and the ISA. They are the prosecutor, judge and jury.

  6. #6 by UnkerLai on Tuesday, 21 October 2008 - 6:43 pm

    Yes YB Kit,
    Please bring this up in parliment. What happened to the initial 5B? Now the additional 5B is to be utilised again for whom?
    This is so blatant and taking us rakyats all for fools and morons. The amount involved is huge by any standards and to have absolutely no oversight and accountability is simply unacceptable……oops I forget, this is Malaysia Bolih where anything Umno/BN does is ‘for the good of the nation’. Yeah, right.

  7. #7 by bclee on Tuesday, 21 October 2008 - 6:53 pm

    YB Lim why approved of rakyat money never table in parliament to disccuss, to refine before impliment ?
    it seem very much quetionalbe after 5 years no one accountable for the profit or loss of these company which public money invested.
    I think the minister owe us the rakyat an answer to this valucap issue.
    YB Lim keep on pressing for an answer from the parliament open tomorrow.

  8. #8 by Godfather on Tuesday, 21 October 2008 - 6:55 pm

    There’s this guy I know well – he’s an UMNOputra and he borrowed a lot of money to buy a controlling stake in a publicly-listed company. As he is seen to be a “tokoh bumiputra”, the PM personally intervened and helped this UMNOputra get the necessary loans. Now the market has dropped 30 pct from the days that this UMNOputra secured the loans, so he goes to the PM and pleads for further support, or the banks will simply sell his shares and claim any shortfall from him. This could cause a high profile bankruptcy. PM says he will talk to Nor Mohamed Yakcop.

    Is Valuecap going to spend money supporting this UMNOputra’s counter ?

  9. #9 by kftang on Tuesday, 21 October 2008 - 7:03 pm

    When borrowing money is concerned, why must it be from the EPF most of the time? All these years EPF members and contributors are grumbling and complaining of low annual dividend pay-outs, under 6% usually! Is the EPF playing the role of a soul saviour?

  10. #10 by badak on Tuesday, 21 October 2008 - 7:22 pm

    A lot of skeletons are coming out of the closets of the 5 PR States.If we the rakyat want to know how our taxes are spent,Come next election kick OUT UMNO led BN govertment.
    Then and only then we will know the truth.Until then we will just have to see our taxes going to the cronies of the BN GOVERTMENT.

  11. #11 by katdog on Tuesday, 21 October 2008 - 7:23 pm

    I noticed an interesting statement in this article:

    “The measures paid off, with developers reporting higher sales, more than half of which went to foreigners, and prices in popular areas up too, said property consultant Ho Chin Soon.”

    More than half went to foreigners!? Is this how our government intends to get FDI? By having foreigners buy property in Malaysia which they will then sell off to locals for a profit?

    Is the government setting us up for a housing market bubble to be burst later on?

    Beware, the economic policies of the current government is pathetic and downright dangerous.

  12. #12 by chongs on Tuesday, 21 October 2008 - 8:02 pm

    EPF retirees, please take all your money out ! ASAP. The govt. may change EPF rules and regulations. The govt. may not give back all your entitlement in one lump sum. Instead may give you by installments, especially when oil prices are falling, Petronas cannot maintain the high living of those goons. Najis said our economy is sound and safe, why then he needs 5 Billion ! I fear the worst !! Why not take from Petronas ?

  13. #13 by baoqingtian on Tuesday, 21 October 2008 - 8:17 pm

    Common sense will tell you if Valuecap had made some profit during the bull period, it could reinject the money (capital + profits) into the current undervalued market and it definitely doesn’t need any financial help to do this. But the fact that government has to pump in another 5 Billion shows that Value Cap might have lost some money during the investment period.

    Value Cap was formed in 2003 and started investing in 2004. After 4 years of bull period, they should have made some profits by now and be smart enough to get out of the market before it plunged.

    So, please Njis , we are not as dungu as you!

  14. #14 by lopez on Tuesday, 21 October 2008 - 8:26 pm

    Now the sucking tube is place into the peoples pocket money , last straw before goes bonkers…..hey it is the old man’s coffin money…borrow from epf ?, let the EPF clown speak up.

    How did he get convinced ? and on what basis if any that approval is granted.

    You ever heard how the japanese people objected when their postal money was about to be used in similar ways?

    the advocater….ended up submitting his resignation… our dg has such guts if he knows it is not right AT ALL.

    Remember , the DG is a trustee to the funds in the EPF.

    am i correct here?

    How is he empowered if ever to allow this to happen?

  15. #15 by kanasai on Tuesday, 21 October 2008 - 8:31 pm

    Change of government will imminently happen by the time EPF gone bankcrupt. Our nation and future generations are bleak as long as long as the abusive UMNO is in power. Till now, Mr Najis can’t come out with a comprehensive and innovative preventive measures against the impending recession. Contrary to Mr. Lee Hsien Loong, PM of Singapore who already declare recession & which I believe is much well prepared compared to Malaysia in facing this crisis, Mr Najis keep on harping of our Malaysia good economic health with nothing much to plan.

  16. #16 by swipenter on Tuesday, 21 October 2008 - 9:15 pm

    Let us list the spending of Najis so far in his political career:-

    1. Computers for schools
    2. Naval patrol boats
    3. Polish Tanks
    4. French submarines
    5. Russian fighter jets
    6. Helicopters
    7. National Service
    8. Space tourism?
    9. Rm5bil for stock market

    Judge for yourself how wisely he spends the country monies?

  17. #17 by despin on Tuesday, 21 October 2008 - 9:27 pm

    Why did Valuecap not make money during the last 4-5 years of bull run? The answer is because Valuecap is not meant to make money in the first place. It is a scam to siphon off arbitrage of shares into someone else’s pocket. They are now using the financial crisis as a disguise/red herring to do more of the same using our hard-earned savings in EPF.

  18. #18 by Godfather on Tuesday, 21 October 2008 - 9:36 pm

    Paul Krugman characterised the Bush administration as “the government of stupid”. I suggest we know refer to the Najis administration as the government of stupid.

  19. #19 by UzMiNoOnist on Tuesday, 21 October 2008 - 9:38 pm

    This is how money is siphoned out of the system. This is a blatant abuse of power to cheat the citizen, more so to those who honestly paying their income tax year in year out. I am definitely finding ways to stop contributing income tax as it will be wasted for something that definitely not going to benefit me or my future generation as a non-bumi.

  20. #20 by Anak Msia on Tuesday, 21 October 2008 - 10:02 pm

    do you really believe gomen pump in the money ?

    maybe our FM is just giving hope to the market to boost the confident of the people. It is all because the whole thing is not transparent that we end up start guessing, this is malaysia way of life already, everything the gomen proposed, we said “sure or not”,”true or not”,”can or not”

  21. #21 by kwkean on Tuesday, 21 October 2008 - 10:23 pm

    Errr, I have a question to ask. Do we really have to contribute 11% of our salary to EPF? Employer will get sue if they do not contribute to their employee’s EPF. How about employee?? Will we get sue too?? If won’t, can I choose not to contribute??

    I don’t want my hard earn money to be in these cronies hand!!

  22. #22 by riversandlakes on Tuesday, 21 October 2008 - 10:25 pm

    Barang Naik spending themselves into the pit of implosion.

    EPF is my money. Who gave you the permission to spend it on what-is Valuecap?

  23. #23 by kyototan on Tuesday, 21 October 2008 - 10:41 pm

    One of the top Malaysian Bank had been badly burn from the US downturn. Hopefully Valuecap shall be able to take over some of their undervalue investment so that they are able to continue to assist local sayang.

  24. #24 by cinaindiamelayubersatu on Tuesday, 21 October 2008 - 11:13 pm

    …pump to my kocek kot…

  25. #25 by HJ Angus on Tuesday, 21 October 2008 - 11:43 pm

    I think we should all save our energy and channel it to get rid of the BN government in the next elections.
    Only then will we have a chance to examine all the lose-money schemes like ValueCap and the Maybank giveaways.
    I encourage all of you to go and join a political party now for the next elections may not be so easy with a more combative BN.
    Those who have not registered to vote please do so asp.

  26. #26 by lopez on Tuesday, 21 October 2008 - 11:43 pm

    go suck an egg, even greenspan have to ponder before saying anything at all….But again we can never used US as a comparison because we are in a different league.

    Nevertheless all FM of reputable nations such that has significance of having small corrupt regimes index have to ponder before uttering any statements of the nation’s reserves conditions but in bolihland every wannabe FM or de facto FM claims without blinking an eye that the nations financial and even her economy are in good standing…
    i say these people are talking shit, to whose standards such statements are made ….by own claims…on the other hand the nations ac books cannot be interpreted by the flip of a note book or a call or a key on the laptop.
    it cannot be said in a statement ….just try finalising and conciliate your own monthly expenses with your wife……
    and who the hell these dummies are trying to fool…you and me of course…and as usual they ‘ll get away with it….

    DSAI you have experience in the FM , you know the strengths and weakness …….blast the loose nuts out before we drop apart.

    Ask Lim gone thong…

  27. #27 by sudokuku on Wednesday, 22 October 2008 - 12:05 am

    EPF is changing the name to Empty Penniless Fund or Empty Porkai Fund for sure.

  28. #28 by HJ Angus on Wednesday, 22 October 2008 - 12:23 am

    Why does EPF have to make a loan to VC to invest?
    EPF managers have the authority to invest directly into the so-called undervalued stocks.
    Is it because EPF is not supposed to own more than 10% of any company or some other restrictions that ensure spreading risk?

  29. #29 by yhsiew on Wednesday, 22 October 2008 - 1:11 am

    Pumping extra RM5b into Valuecap – is Najis thinking of filling pockets of UMNO elite or benefits of the rakyat??

  30. #30 by rider on Wednesday, 22 October 2008 - 1:29 am

    Walkouts and absences, objection to motions tabled, arrogance and abuse of power, ketuanan melayu and don’t know what what somemore. Barisan/umno is closing ranks against opposition and dissension! The rakyat is already feeling miserable. Come March we are going to have a wonderful new PM? And now they want to dig into EPF. Where is DSAI and his 31 MPs??? BULLSHIT!!

  31. #31 by Kathy on Wednesday, 22 October 2008 - 6:41 am

    Don’t ask where the money has gone — we all can guess already. It is time to ask how to stop such madness of ripping the Rakyat’s hard earn money. We can find better use of the 10Billion Ringgit – better transportation infrastucture, better internet facilities, better ports, better equipped schools, etc. The list can go on and on.

    Don’t we have a say on what we want to do with our money?

  32. #32 by 318 on Wednesday, 22 October 2008 - 8:10 am


  33. #33 by Bigjoe on Wednesday, 22 October 2008 - 9:09 am

    The thing is this. Valuecap is borrowing the money for equity investment. If Valuecap make money, the profit goes to the govt and cronies BUT if it losses money, EPF takes the hit. Either way, EPF is shafted always…

  34. #34 by pakmang on Wednesday, 22 October 2008 - 9:17 am

    Why we have to go through Valuecap S/B to invest those stocks undervalue & not invest direct from EPF?

    Is it blatantly abuse of power and brazenly cheating the rakyat money?

  35. #35 by suara on Wednesday, 22 October 2008 - 9:51 am

    In the first instance, Valuecap should not even have been in existence. Why should the govt be propping up the shares of undervalued shares? Even more scandalous is that no one knows how Valuecap had performed.

    The KLSE should be allowed to operate in a free market environment. The values of the shares at any given time should be left alone given the prevailing environmental factors at that point in time. If the shares are undervalued at the prevailing market price, let market forces takes its course as over time, the price of these shares will adjust accordingly based on its fundamentals.

    Besides, why should the govt be bailing out these investors. If they are prepared to invest in the market, they have to be prepared to take the risk that accompanies it. What about those other millions of rakyat who do not invest and who don’t have the capacity to invest in the market.

    Not to mention, these same RM5b can have little impact on the KLSE if the world economy goes into a tailspin and share markets around the world tumbles again. Just by propping the market does not re-build confidence in the Malaysian economy.

    Instead, the RM5b can be better spent on other programs like maybe a stimulus plan especially in these unpredictable times to pursue economic growth. This way, the rakyat benefits and in turn so do these companies which may further add value to their shares. I think money would be better spent this way. The govt do not even need to prop up these undervalues shares.

    Sad to say, our policy makers and leaders need more in-depth analysis and thinking instead of just superficial and cosmetic actions.

  36. #36 by Thinking Two on Wednesday, 22 October 2008 - 9:54 am

    During the TimeCom IPO issue years back, EPF board clarified in the newspaper headline that EPF did not TimeCom share but it was merely the conversion of the outstanding loan with TimeCom into shares.

    With the shareholding passed to EPF and TimeCom no longer owing EPF any money, EPF is deemed to be the beneficially owner of the TimeCom share directly or indirectly.

    “Acquisition of shares is equal to buying of shares.”

    Any Lawyer or Accountant will be able to comfirm this.

    They always think they can fool all the people all the time.

  37. #37 by Thinking Two on Wednesday, 22 October 2008 - 10:20 am

    Using Public monies for private project!

    Supporting the crony companies!

    The same reply will be given : Loan to be converted into shareholding.

  38. #38 by Thinking Two on Wednesday, 22 October 2008 - 10:22 am

    Raykat – Are you all still sleeping?

  39. #39 by shortie kiasu on Wednesday, 22 October 2008 - 11:01 am

    This is called ‘market manipulation’ by the government. The price of shares of a public listed company is determined by supply and demand; and not what the governmenr said it is undervalued and starts using taxpayers money to pump up the price artificially.

    If the government thinks the price of the shares are undervalued, then take it private and keep it.

    In the stock exchange, it is open trading based on perception and supply and demand of the shares.

  40. #40 by oknyua on Wednesday, 22 October 2008 - 11:26 am

    I am one who conditionally supports this move. As compared to the meaningless purchase of 20% TimeCom at RM3.20 years ago, this RM5 b to purchase stocks in the KLSE is positive, as far as I can see.

    But as highlighted by Godfather, who decides what to buy and at what price? As in all things handled by the government (aka UMNO), the RM5 b could easily be abused, as the RM3.20 purchase of TimeCom. Would the RM5 b be used to prop GLCs (aka UMNO)? Would that sum be used to bail out someone in trouble? (After all they buy delegate votes – so what’s new).

    Purely on business consideration, yes, its time to look at finance and plantation stocks. But based on experiences of the past, EPF officers might not have an input into decisions affecting purchases and sales of equities. Politics (aka UMNO) would decide as in the RM3.20 purchase of TimeCom (now RM0.27).

    Is ValueCap’s account opened for public viewing?

  41. #41 by citizenwatch on Wednesday, 22 October 2008 - 12:11 pm

    It’s all a subterfuge, pretext, a front and affront to all us rakyat. They dig into our hard-earned money to save and prop up none other than their crony companies. On the surface, it is a simplistic measure to counter the global economic crisis.

  42. #42 by Godfather on Wednesday, 22 October 2008 - 12:30 pm

    It’s NOT meant to be transparent. If it were, they would have crowed about it long ago. It was meant to circumvent the recalcitrant attitude of the investment committee at the EPF who have occasionally resisted calls to support certain counters.

  43. #43 by rubini on Thursday, 23 October 2008 - 11:37 pm

    5 billion for ValueCap. They say its a loan, whats the return rate for EPF. The fact it’s to bail out some crony companies due to KLCI share value dropped like stone, so someone’s losses have to be covered with workers money. So this clearly shows, Government itself does not have the financial resources to value ValueCap.

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