The DAP today launched a public campaign demanding an explanation from the Employees Provident Fund (EPF) over the accumulation of the RM15 billion 'paper losses' which had led to a record-low dividend payment for last year.

DAP secretary-general Kerk Kim Hock said the campaign's objectives are to protest the 40-year low dividend of 4.25% for last year, to demand for greater accountability, transparency, quality and security of funds and to reform the investment policy.

"There have also been excuses that Sars (severe acute respiratory syndrome) and the Iraq war had caused the lowest dividend," he told reporters at a day market in Petaling Jaya.

"These are unacceptable excuses as Sars and the war only occurred this year while the dividend was for last year."

No excuse

Kerk said there was no excuse for the EPF's poor performance because Malaysia had in fact registered a higher growth of 4.2% last year compared to 0.4% in 2001.

He said EPF chairperson Halim Ali had explained the low dividend as reflective of a difficult investment climate with a low interest rate regime for the last four years as well as a lackluster stock market.

The truth is, he said, the EPF had to make provision totaling more than RM5 billion for 'paper losses' in equity and doubtful debts from 1998 to 2002.

"Certainly, if no provision was made for such huge paper losses, contributors would have gotten a higher dividend irrespective of the low interest rate regime and slow stock market," he added.

For the 'EPF contributors deserve higher dividend' campaign, the DAP prepared leaflets stating that the dividend payout was unacceptable, together with facts and figures on the EPF's performance over the years.

It also lays down contributors' rights and what the public should do or expect from the EPF.

Kerk said the DAP is advising contributors to pressure the government for a positive change.

"We are asking for people's action because only that can bring about changes for the better in the EPF. Otherwise, the situation is going to get much worse than now.

"Of course, the other thing people/contributors can do is to translate their protest into votes."

Deteriorate

Kerk said the rot in the EPF is so bad that things are expected to deteriorate soon.

"It's not so much about the dividend/money alone, it's more of stopping the rot before it's too late."

Quoting a recent revelation by Malaysian Trades Union Congress secretary-general G Rajasekaran, he said the EPF was sitting on RM14 billion worth of 'paper losses'.

Kerk said RM2 billion of that are from the EPF's ill-advised and disastrous venture as a housing and land speculator in the mid-1990s through the Malaysia Building Society Berhad, which eventually had to be written off in the subsequent few years, leading to an even lower dividend.

In fact, he said MTUC president Zainal Rampak, who sits on the EPF Board as an employees representative, had also stated that the EPF had suffered RM15 billion 'paper losses' in recent years due to imprudent investments.

"If these revelations are true, the EPF dividend in the coming years would be even lower as it would have to provide for at least RM2 billion 'paper losses' every year for the next five years to clear the balance of some RM10 billion 'paper losses'.

"As the EPF money is the hard-earned cash of contributors, it must explain how the total of RM15 billion 'paper losses' were accumulated and their effect on the EPF dividend in the coming years," added Kerk.

He also urged the labour movement to make this as their "single, major issue" at their general assemblies or delegates conferences.

Since the EPF announced the record-low dividend in April, opposition MPs and the trade union movements had demanded an explanation and an upward revision of the dividend payout.

The MTUC also held nationwide pickets.