The Employee Provident Fund (EPF) has invested in 15 government linked companies (GLCs). The investment totals RM16 billion.

Deputy Finance Minister Awang Adek Hussein said the 15 GLCs are big concerns that promise high returns for EPF contributors.

"Returns for the contributors is one of the criteria considered by EPF before making an investment decision, that's why EPF only invested in a handful of GLCs only," he was quoted as saying by Bernama .

He was responding to a question from Senator Omar Faudzar in the Dewan Negara today.

Awang Adek said EPF also provided loans worth RM5.2 billion to some of the 15 GLCs.

The number of investment and loans only represent eight percent of EPF's total assets worth RM264 billion.

Replying to Senator Dr Norraesah Mohamad, he said, EPF at present has less than 45 percent stake in the Malaysian Government Securities (MGS) in the form of bonds.

"Prior to this, EPF's stake in MGS accounted about 75 percent. The stake held by EPF in MGS is on the decline due to the smaller bons being issued by the government in the open market.

"Apart from that, the EPF too needs to invest in other instruments including shares to provide greater returns to contributors."

Keeping TNB strong

In another development, Deputy Prime Minister Najib Abdul Razak said the government's decision to ask Tenaga Nasional Bhd (TNB) to reduce half of its electricity supply reserves was to ensure the utility giant would continue to be in a financially strong position.

He said the group's position should also be viewed from a wider perspective including those related to its contracts with the Independent Power Producers (IPPs).

"The matter is also related to the IPPs' position, high reserve margins, that is why we must see the overall aspects including whatever contracts signed between TNB and the IPPs," he said.

Najib was commenting on the government's decision to ask TNB to reduce the national power reserves to 20 percent from 40 per cent currently to avoid the company from being insolvent.

At the same time, he said the reduction in power reserves would be in accordance with international practices, which were usually at 20 percent.

"TNB's reserve margin has so far been maintained at 40 per cent and this means part of TNB's finances are already tied.

"However, TNB's position must be seen in its entirety to ensure the group becomes financially strong and stable," he said.

Asked whether the directive would help the government maintain the present electricity rates, he replied:"I can't give any assurance, the matter is being given due consideration by the cabinet, we have to have wait for the cabinet decision.

"That is why, as I said earlier, TNB's position should be seen as a whole, including the tariffs to be imposed later," said the deputy premier.