Valuecap – Nor Mohd’s “avoid and evade” game

I had hoped against hope that the Second Finance Minister, Datuk Nor Mohd Yakcop, would come to Parliament today to give the first full and proper accounting of Valuecap’s performance in the past five to six years.

I was dead wrong. Nor Mohd staged an “avoid and evade” play, fully agreeing when I interrupted him that Valuecap needs to be more transparent, but when pressed to give a full and proper accounting of Valuecap’s past performance, pleaded that he did not have the time to do so during the debate.

This prompted my question asking what is the use of him agreeing that Valuecap should be more transparent but refusing to be transparent when asked specifically?

Although Nor Mohd said he did not have the time to give an accounting on the past performance of Valuecap during his winding-up speech, this did not prevent him from going on and on on other subjects – to the extent that I walked out in disgust!

In view of Nor Mohd’s admission that Valuecap had been remiss in the past in failing to be more accountable and transparent in its custody of taxpayers’ money, and his excuse that he did not have the time in his speech today to be transparent about Valuecap’s past performance, he or the Finance Minister, Datuk Seri Najib Razak should make a ministerial statement in the current meeting of Parliament to report on the performance of Valuecap in the past five years.

I had earlier asked Nor Mohd why the Employees Provident Fund (EPF), which had been directed by the government to provide Valuecap with a RM5 billion loan to buy undervalued stocks, had changed its previous standing opposing such an adventurist investment – also reminding him of the MTUC’s objection to the RM5 billion EPF loan to Valuecap.

In November, 2002, when the Valuecap was being set up, there were strong talks in the market that EPF monies would be involved.

I read to Nor Mohd the EPF’s denial and clarification issued on 20th November 2002 by its Deputy Chief Executive Officer (Investment), Dr. Roslan A. Ghaffar, viz:

“The Employees Provident Fund (EPF) denies reports in today’s newspapers (November 20, 2002) which associated the operations of ValueCap Sdn Bhd with the EPF’s investments and two other state-run funds.

“The EPF wishes to clarify that it has not appointed ValueCap Sdn Bhd to manage the EPF’s investment fund. The EPF also denies that its involvement in the KLSE is to shore up the stock market. The EPF’s investments are not used to bail out ailing companies.

“The EPF invests in companies with sound fundamentals, long-term growth potential and competent management. The EPF is always prudent and professional in its approach when investing members’ savings. The Fund ensures that the investments are safe, not exposed to high risks and gives reasonable returns to its members for their retirement.”

Nor Mohd just made a bald denial that EPF had changed its stand on Valuecap investments.

  1. #1 by rubini on Tuesday, 11 November 2008 - 6:51 pm

    Tipu Sultan was a revered King in India, who died fighting against the British. Today in M’sia we have Tipu Sultans, who keep lying and lying despite the fact that everyone knows that they are lying. This is degredation intio which the BN has fallen into.

  2. #2 by yhsiew on Tuesday, 11 November 2008 - 6:52 pm

    Nor Mohd staged an “avoid and evade” play……….

    It is a clear case of plundering of taxpayers money.

  3. #3 by k1980 on Tuesday, 11 November 2008 - 6:54 pm

    He’s just hoping that he’ll get off scot free like Lazak Bagindo. Some other unfortunate soul, like the 2 UTK policemen, will be left to pick up the blame

  4. #4 by HJ Angus on Tuesday, 11 November 2008 - 7:12 pm

    Any fool will realise that ValueCap must have done POORLY with their investments.
    Otherwise they would be blowing their trumpets to the sky. This type of company is quite useful if one wants to do transfer payments.

  5. #5 by All For The Road on Tuesday, 11 November 2008 - 7:42 pm

    Second Finance Minister NMY’s deliberation and explanation in Parliament on Valuecap’s performance was all expected and a fuss. The reasons were pre-cooked and pre-planned which any right-thinking person would anticipate. Many a time we are fed with rubbish and filth to the utter disappointment and disgust of irate tax-payers. What is there to ask for a clarification if the result is all expected?

  6. #6 by luking on Tuesday, 11 November 2008 - 7:43 pm

    What action can we epf members or contributers do to prevent them from risking our retirement money away,besides waiting for the next GE??urgently please, b4 it’s too late.

  7. #7 by Jimm on Tuesday, 11 November 2008 - 8:52 pm

    they thought that they can easily cheat the rakyat at any time of the day.
    they have shared these illegal wealth with the royal families to keep they quiet.
    they have gone through evil ways to silent those who come to know of these and they were protected by royal families because of greed.
    at the end of everything , it only shows that the royal families have lesser brains to value their actual wealth and greed have taken over their sight.
    So, rakyat must be proud of God’s ways of taking away things that those people doesn’t deserved after all.
    Rakyat are suffering and yet , we can still find happiness along these challenges.
    God will provide rakyat , as He loves us.

  8. #8 by Yee Siew Wah on Tuesday, 11 November 2008 - 9:18 pm

    This mamak 2nd FM is real snaky. He thought he can fool the rakyat with his tricky words and moves. What he said is all garbage.
    How can these bums in Finance use rakyat money to support the declining market. Actually they are trying to save some big greedy bums who have been badly burnt in the share market. Support the market, my foot.

  9. #9 by human1 on Wednesday, 12 November 2008 - 12:53 am

    I still call the recent move by EPF to loan RM5 bil to Valuecap the legalised criminal breach of trust. Nor Mohd Yakcop has continued making the guarantee call on behalf of the government, without disclosing the details such as the exact repayment interest.

    Khazanah, KWAP and PNB invested RM5 bil into the startup Valuecap in 2003. The trio also loaned RM5.1 bil (rumour indicates this too originates from EPF, in turn loan to the trio) to Valuecap, which will be due Febraury next year. That made up RM10 bil to enable Valuecap to gamble in the local stock market since 2003. That also makes the trio the shareholders and bondholders.

    To snowball an investment from the equity market effectively, two factors are essential – large capital and long-term duration, coupled with the right strategies consistently as follows:

    1. “buy low and sell high” at the right times to cash in and maximise capital gain.
    2. “hold” blue chips that yields high dividend

    One would think this is a killer strategy but I assure you there is no sure-win formula in the stock market gamble due to financial climate changes and risks, or else every player would be winner and there is no loser.

    There is only one Warren Buffet, one Jim Rogers or one George Soros in this world. They are what they are, got rich being a fundamentalist or speculator. Don’t forget for a fund management company like Valuecap where it does not have any products or services to offer, there is substantial operating costs:

    1. high fees paid to the professional fund managers
    2. high interest in servicing the loan

    Thus it is logical for you to become a skeptic when someone guarantees you an investment will reap large profit and return in the long run. In the long run, we are all dead. There is no free lunch in this world.

    It seems Valuecap is unable to unwind its portfoloio of stocks to pay back the loan this coming Feb due to the bearish market, forcing it to refinance and extend the loan period for another 3 years.

    To counter the declining trend of the market, one possible strategy is to borrow more money to buy more blue chips at times, praying that the market will bottom out and enjoy the rise of stock price later. This too can be risky and drain the cash hard, if the market slips further. It will be a disaster if the bet is way off.

    There is always loophole and tendency for the government to mishandle public fund. In Argentina where the government has recently nationalise the private pension funds on the ground to protect the fund from further losses incurred in equity market following the global financial turmoil, there are critics that fear the government will “borrow” the fund money to pay off foreign due debts or the government risks defaulting the debts.

    After all in our case, RM5 bil is just a small amount of the total amount exceeding RM330 bil in the EPF fund. Nonetheless, it is disturbing to find government to potentially repeat the act to channel money from retirement fund into its own purpose. Having said this, the question remains: Why should EPF loan RM5 bil to someone, without benefitting the members directly?

    I am pretty sure when reaching my retirement age, I would still be able to withdraw all my money from the EPF pool, to enjoy my retirement life. For your children who are born today, I am not too sure if they can get all their money when this next generation retires.

    If they don’t due to insufficient money in the fund, they may have to ask this question in front of the grave of Nor Mohd Yakcop who had guaranteed the sustainability of the retirement fund today.

  10. #10 by raven77 on Wednesday, 12 November 2008 - 1:05 am

    EPF Contributors have every right to take out an injunction to prevent Najib and co from plundering their money….with the courts currently in a liberal mood and on an anti Najib drive….the PR should gather enough evidence and get a legal team to apply this injunction before we are left with bones…..

  11. #11 by waterfrontcoolie on Wednesday, 12 November 2008 - 6:58 am

    Mamak & gang certainly pretended to hate the US in order to get votes but they never fail to follow US in ‘rescusing’ pariah companies at the KLSE. In fact 80% of them are run with the knowledge of the power that be and cheat the unsuspecting investors in the country.
    It is a known fact that many major shareholders are running listed companies as if they are the sole owners. When caught, problems are always ‘kautin’.
    So the poor Malaysian workers are asked to bail them out! how nice, all the crooks with connections will continue to plunder.

  12. #12 by taiking on Wednesday, 12 November 2008 - 9:04 am

    Just like a school kid answering a question on moral, our 2nd fin min knew and of course gave the correct answer to the need-to-be-transparent question LKS raised.

    The RM300b sitting in epf is definitely and irresistably attractive to those who are greedy and also those who are desperate.

    By the way what is valuecap? Heard of it but no clue as to what it actually does. Perhaps the umno government has been too transparent with this one. Cos I kant see it.

  13. #13 by ed9919 on Wednesday, 12 November 2008 - 9:07 am

    Wrote a lot but due to system glytch mentioning I was not logged in.

  14. #14 by ed9919 on Wednesday, 12 November 2008 - 9:16 am


    i recently came across a matter that is related to our EPF withdrawal.

    The matter is regarding the A/C II where EPF allows us to withdraw to pay for balance of our housing loans.

    With a simple S & P we are able to apply for it. Let say that we have 100K in A/C II, they will then immediately deduct the amount and pay to your mortgage loan.

    But not many would take notice until too late, the total amount is not immediately transfered into the mortgage loan, but will be paid in an installment method just like what you’ve been repaying your loan eg. 50 months or so.

    This is not fair to us as we are able to negotiate with the martgage loan concern for a better rate and save more on our interest.

    The other bothering matter would be that amount is transferred to another undisclosed company to manage the monthly installments.

    This company is it another link to the Valuecap??

    Well this clearly shows the mismanagement of our EPF funds and another form of daylight robbery on our hard earned money.

    I hope there would be an investigation into this matter as to ensure that the rakyats’ money would be accountable.


  15. #15 by Thinking Two on Wednesday, 12 November 2008 - 9:20 am

    Take action against EPF!!

  16. #16 by ENDANGERED HORNBILL on Wednesday, 12 November 2008 - 10:57 am

    I don’t trust Nor Mohd.
    I don’t trust Najib.
    And I don’t trust the EPF.

  17. #17 by ENDANGERED HORNBILL on Wednesday, 12 November 2008 - 10:59 am

    Oh, let me just add:

    Now I also don’t trust that nice old man, Pak Lah. He has abused the RAKYAT’s trust time and again.

    To redeeem the trust, Pak Lah must call for a anap GE rightaway.

  18. #18 by Godfather on Wednesday, 12 November 2008 - 11:14 am

    Valuecap, Bank Rakyat, SME Bank, Agro Bank, Khazanah, EPF, Maybank – these are all Ah Kung’s banks. Where else can they dip their fingers into the country’s pie after March 8 when the Oppositon eyes are all watching ?

    Transparency ? Phtui !

  19. #19 by ENDANGERED HORNBILL on Wednesday, 12 November 2008 - 11:25 am

    By the way, those nimwits from UMNO must learn that it is not unpatriotic to learn from the rest of the world and to take a leaf or two from successful ones. There is a limit to the patience and longsuffering we have for numbskulls. Ask Tun M who is not exceptionally bright but sufficiently endowed with some sense in that cranium which he frequently chooses to use wrongly. So here is Lesson 101 for Tun M, Pak Lah and Najib – with love from Goh Chok Tong, a successful neighbour.

    From Straits Times, S’pore:

    “Senior Minister Goh Chok Tong addressed 500 leaders from Hong Kong’s government, business, academic and media sectors at the Asia Society Hong Kong Centre’s annual dinner. He described four broad attributes of successful political systems.

    First, accountability and transparency were needed for long-term stability. Governments must govern with the consent of the governed, he said.

    Second, governments must formulate policies for the long-term public good, even if these are unpopular in the short-term.

    Third, there must be equal opportunities for citizens to compete and succeed. Only then can leaders enjoy wide support and ensure sustained growth.

    Fourth is a culture of identifying and grooming talent for public service, to attract the best brains to join and work in the government.

  20. #20 by ktteokt on Sunday, 16 November 2008 - 10:12 am

    Such nice words from Najib, saying the GOVERNMENT is going to guarantee repayment by Valuecap. The question is who is going to guarantee the existence of the GOVERNMENT? What if the GOVERNMENT collapsed? Who then is going to guarantee???

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