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Finance Minister, Daim Zainuddin has finally admitted that the Employees' Provident Fund (EPF) had given a RM500 million loan to Time dotCom in 1996.

Time dotCom has pledged to repay half the loan while the balance will be settled in the form of share equity.

Two weeks ago, EPF chairperson, Abdul Halim Ali denied that the fund had purchased shares of the beleaguered company which had not been subscribed during its recent initial public offering.

However, Abdul Halim admitted that EPF had approved a RM500 million loan to 'salvage' the Halim Saad company (via Time Telecommunications Holdings, a subsidiary of Time Engineering Bhd).

EPF, which has 9.7 million contributors, is the largest fund in the country with a total of RM180 billion in deposits.

The fund is managed by a board of directors who are assisted by expert advisors while matters of investment are tabled by its investment panel.

There are six workers union representatives on the EPF board, including the presidents of MTUC and Cuepacs respectively.

Concerning its involvement with Time dotCom, one cannot help but ponder whether it was a wise decision on the part of its directors and the investment panel?

Time dotCom is part of Halim Saad's empire. This renowned corporate leader also owns Renong, a problematic conglomerate noted for its close ties with Umno and its leaders.

Due to financial problems, a Renong subsidiary, Time Engineering Berhad was forced to restructure. During the restructuring process, Time dotCom was set up. It is in the midst of this exercise that EPF was snared into issuing a loan and purchasing its shares.

Decreasing dividends

The question to be addressed here, is whether it is proper for the employee's savings fund to be linked with problematic companies owned by Halim Saad, a crony corporate leader?

Whose interest should be of priority to the EPF investment panel - its 9.7 million contributors or that of Halim Saad?

From year to year, there has been a decrease in the dividend being paid out by EPF to its contributors. Last year, saw its lowest rate ever, which was a six percent pay out.

At the same time, more and more information is being unearthed about the abuse of EPF funds to rescue crony companies linked to Mahathir and Daim.

In 1999, a total of RM12 billion of the citizens' and country's funds from various sources had been used to throw a lifeline to Renong.

An economist had stated that some RM50 billion (to date) of these funds had been utilised to rescue ailing companies belonging to cronies, especially those linked with the Prime Minister and the Finance Minister

The employees' funds in the EPF appears to be one of the main victims of this rescuing practice. Apart from Time dotCom's RM500 million loan , EPF funds have also been used to rescue several other companies.

Among them are Khazanah Nasional Bhd which borrowed RM2 billion of EPF funds, Perwaja, RM710 million and KLIA Bhd, the developer of the Kuala Lumpur International Airport, which secured a loan of RM1 billion from the EPF.

All these were large-scale loans involving hundreds and thousands of millions. After participating in many bailouts of crony companies within the nation, the EPF now proposes to expand its investment operations overseas.

We hope the members of the EPF board of directors, including Zainal Rampak (MTUC president) and N Siva Subramaniam (Cuepacs president) will not bow to the wishes and desires of certain quarters and epitomise the Malay saying, ' Harapkan pagar, pagar makan padi !'

HASSAN KARIM is vice president of the Parti Rakyat Malaysia (PRM).