An opposition party is considering legal action to challenge the validity of the Pensions Trust Fund (KWAP) for spending almost RM1 billion to take up 48 percent of Time dotCom Bhd's ailing shares.

DAP chairperson Lim Kit Siang said his party is mulling over the possibility of taking a law suit to declare KWAP's 273.86 million shares of the telecommunication company's initial public offering (IPO) as "illegal, null and void".

He added that the KWAP's "bailout" of Time dotCom had jeopardised "the pensions and gratuities of 850,000 civil servants in the country". The fall in the company's shares since its IPO has resulted in pensions fund registering a loss of about RM300 million.

Lim said that it would be scandalous if KWAP had illegally misused its funds to sub-underwrite the controversial IPO, as the unprecedented size of 48 percent subscription for an underwriter exceeded that of three other lead underwriters, which could not have committed more than 20 to 30 percent of the IPO each.

The three lead underwriters are Commerce International Merchant Bankers Bhd, Perwira Affin Merchant Bank Bhd and Affin-UOB Securities Sdn Bhd.

Lim also called on Finance Minister Daim Zainuddin to present a White Paper in Parliament next week on KWAP's sub-underwriting and declare whether the opinion of the Attorney-General had been sought on the legality of fund's involvement.

On Tuesday, Daim confirmed that KWAP acquired the lion's share of Time dotCom's IPO issue, ploughing some six percent of its total funds by taking up 273.86 million shares at the cost of RM903.74 million.

Daim said that KWAP became a sub-underwriter for the company's IPO as the fund had expected the shares to be oversubscribed.

'Unlawful act'

According to Lim, the Pensions Trust Fund Act 1991 (Act 454) under which KWAP was established does not empower the fund to use its proceeds to go into the business of underwriter or sub-underwriter for IPOs of shares of companies.

He added that during a meeting with EPF chief Abdul Halim Ali on Wednesday, he was told that it was unlawful under the EPF Act to use its funds for such a business.

"I have referred to the EPF Act 1991, which amended and re-enacted the EPF Act 1951 and was passed by Parliament in February 1991 in the same meeting which passed the Pensions Trust Fund Act 1991," he said.

"Although Section 10(1)(f) of the Pensions Trust Fund empowers the KWAP funds to be invested 'in any other manner authorised by the minister', it would be most shocking if the finance minister had directed the KWAP to illegally use funds to sub-underwrite the Time dotCom's IPO."

Dr M urged to visit troubled spots

Meanwhile, in another development, Lim today urged Prime Minister Dr Mahathir Mohamad to visit the troubled areas in Petaling Jaya Selatan to galvanise government efforts to end the clashes which have claimed six lives since March 9.

Lim said that though it was heartening that Mahathir visited victims at the Universiti Malaya Medical Centre last Sunday, the prime minister must lead a high-profile visit to the troubled areas to heal the wounds and mobilise the support of all Malaysians.

He added that the four incidents of new attacks targeted at Indians in the area over the past two days should spur urgent government action to restore inter-communal peace and harmony in Petaling Jaya Selatan.

"Although there is no recurrence of the blackest three days of the clashes, sporadic incidents like the four attacks yesterday are sombre reminders that not enough had been done by the authorities to fully quell the after-spill effects of the clashes and to deal with the raw wounds caused by the clashes," Lim said.

"The government and the nation must regard every single renewed attack as one too many which undermines national stability and jeopardises Malaysia's international reputation as a safe destination of investment," Lim added.

Four attacked

Four people were attacked last Wednesday in Taman Sri Manja, Rumah Panjang Petaling Utama and Kampung Gandhi near Old Klang Road.

Selangor chief police officer Nik Ismail Nik Yusoff said yesterday that police have so far arrested 314 people, 77 of whom have been prosecuted for various offences including participating in unlawful assembly and possession of offensive weapons.

He added that his officers had tracked down a man who sent e-mail urging recipients to attack Indians and warning that Malays were in danger of being set upon by gangs of Indians in an area on the outskirts of Kuala Lumpur.

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