The Employees Provident Fund (EPF) has an obligation to explain to its contributors why it has discontinued its suit against Rashid Hussain and five former top executives filed in 2005. A writ of summons to the value of RM1.4 billion was filed against the six by RHB Capital, RHB Securities Sdn Bhd and RHB Equities Sdn Bhd at the Kuala Lumpur High Court sometime in 2005.

The six former top executives were sued "for breach of fiduciary duties, breach of trust, breach of contracts of employment/or negligence in relation to certain margin financial facilities granted by RHB Equities during their tenure as Directors and/or Officers of RHB capital, RHB Securities and RHB Equities."

During the trial, the evidence adduced seem to indicate a clear breach of fiduciary duties. Dubious huge loans with margin financing was approved without any collateral and proper approvals. Surely such obvious dereliction of duty should eventually bring to book those responsible for the loan fiasco. The loan claimed in the suit was not a paltry sum, but for a mind-boggling sum of RM1.4 billion.

Despite public opposition to the acquisition of the RHB group and Rashid Hussain's total debts of RM3.5 billion which included a bond repayment of RM265 million in June 2007, EPF proceeded to acquire the entire parent firm for RM3.9 billion ringgit including warrants and convertible loan notes. At the same time, the EPF also made a RM8.75 billion bid for RHB

Capital at RM4.80 per share.

What remains a mystery was why EPF did not accept Kuwait Finance’s offer of RM2.19 (compared to EPF’s offer of RM1.80) for each Rashid Hussain share and RM7.35 (compared to RM4.80 offered by EPF) for each RHB Capital share? Why was it so adamant in acquiring a heavily-indebted entity when a better offer was on the table?

EPF needs to explain to its contributors why it has decided to discontinue the much-publicised RM1.4 billion claim after acquiring control of the RHB group.

The fundamental question remains as to why EPF was so generous in foregoing what seems to be a legitimate claim of RM1.4 billion claim against the six former top executives of RHB? Was there any covert attempt to conceal the main purpose of EPF's acquisition of the RHB group? Was EPF used as a vehicle to acquire the equity of the RHB group with the intention of

discontinuing the civil suit against the six defendants?

All these perplexing questions need to be answered so that confidence can be restored to the pension fund.