An opposition MP today furnished documents to back his stand that the Employees Provident Fund (EPF) was unwise in deciding to subscribe to RM5.6 billion of Malakof's Istisna bonds and RM1.35 billion of its Al Bai' Bithaman Ajil bonds.

At a press conference in Kuala Lumpur today, PAS central committee member Husam Musa said the EPF board should not have abstained from deciding on the subscription - they should have rejected the very idea of investing.

He referred to the documents, including corporate records and ratings regulations, to question the decision.

In statement yesterday, EPF deputy chief executive officer for investments Dr Roslan A Ghaffar said the chairperson of both EPF and Malakoff - Abdul Halim Ali - as well as EPF panel member and Maybank CEO Amirsham Abdul Aziz had abstained from voting on the matter.

The statement was issued to defend EPF board's move to proceed with the purchase.

Commenting on the abstentions, Husam said this does not absolve the two directors of responsibility for the decision.

"Even though they abstained, they still had instruments of power to influence the decision (to invest in Malakof). It cannot be accepted and does not prove anything on their part (that there was no conflict of interest.)," he pointed out.

Abdul Halim could not be reached for comment as he was said to be on medical leave.

Questionable deal

Husam said various questions have arisen in relation to Roslan's statement on the Tanjung Bin (Johore) power plant for which the bonds were issued.

Roslan claimed that the Rating Agency of Malaysia had assigned an AA3 rating to the independent power producer (IPP) SKS Power, which owns the power plant.

However, this goes against accepted methodology of rating purchasing utility companies higher than IPPs - for instance, Standard and Poor has given purchasing utility company Tenaga Nasional Bhd a lower rating of BBB, said Husam.

Rangkai Positif, the operator and manager of the plant, was established less than a year ago. Husam said this called into question the AA3 rating given to SKS.

"It is very risky to entrust the power plant to a new company that has no prior track record and has to depend on a third party for support," he alleged.

Furthermore, the construction of the 2,100 MW Tanjung Bin power was 500 percent higher that of the Paiton Power Plant in Surabaya, Indonesia, which produces more power, according to Husam.

"Genting Group bought Paiton Power Plant with 2,400 MW capacity, ready revenue generating, secured power purchase agreement and proven operational management team at RM1.5 billion compared to the RM7.8 billion power plant project proposed by SKS Power."

Husam urged Prime Minister and Finance Minister Abdullah Ahmad Badawi to investigate the issue to safeguard the interests of EPF's 10 million contributors.