State-run Employees Provident Fund (EPF) will not directly manage the banking operations of Rashid Hussain Bhd after winning control of the debt-laden group.

"EPF will have minimal representation as we want to leave it to professional directors and professional management to oversee the running of the bank," EPF said in a statement issued late yesterday.

He also said that EPF's decision to take over RHB was to protect its investment in the bank as pension fund was mindful of its responsibility to its contributors.

EPF beat two rivals for Utama Banking Group Bhd's 32.8 percent stake in RHB after increasing its offer to RM2.25 billion from 2.20 billion.

Prime Minister Abdullah Ahmad Badawi and the EPF today immediately donwplayed opposition concerns that the pension fund was abusing public savings and reiterated that the EPF will not be involved in the direct management of the company.

"They (EPF) are very conscious of that. Don't tell me that they are just sitting around with money, no. They are very, very conscious that the money belongs to the people, to those depositors," Abdullah told reporters.

"The EPF will not be running the bank as such but they will make sure the bank will be staffed with the right kind of people. I'll be very surprised if they don't do that because the stake is big," Abdullah said.

Confident of RHB's performance

EPF's chief executive Azlan Zainol also said the fund had chosen to invest in RHB as it was confident of the bank's performance in the future.

"We are not bankers but we will have professional people managing the bank. The current management of the bank is very good. We do not intend to run the day-to-day banking business," Azlan said.

The opposition DAP has earlier said it "strongly objects" to EPF owning and managing the bank, asserting that it has no expertise in doing so and deviates from its role as a fund manager.

"The acquisition brings about very significant risks to the security of the hard-earned savings by Malaysians for their retirement," said DAP's Tony Pua in a statement today.

"The government must ... block the acquisiton of RHB by EPF in the interest of Malaysians otherwise it might be staring at another banking crisis waiting to happen," he added.

Plans to restructure RHB

EPF's Azlan also announced plans to restructure the RHB group. It will delist RHB and maintain only the listing status of RHB Capital.

It intends in time to reduce its interest in RHB Capital from 75 percent to 40 percent and buy out government investment arm Khazanah Nasional Bhd's stake in RHB Bank.

Azlan said that the EPF was looking for strategic partners for the group and did not rule out talks with the losing Kuwait Finance House-led consortium but said it had no plans to turn RHB Bank into an Islamic Bank.

"Hopefully, we can invest together in some other ventures," Azlan said.

EPF will be willing to sell about 35 percent of RHB Capital to a strategic partner.

Kuwait Finance House Malaysia, a consortium of Middle East interests, which had offered RM2.16 billion for RHB, said it still hoped to have a role to play in the newly struck deal despite being a losing bidder.

The group had said it was prepared to pump in RM12 billion to create the world's largest Islamic bank.