An opposition leader today questioned whether the new policy adopted by the Employees Provident Fund to stop investing in 'sin' stocks was a reflection of the government's claim that Malaysia was an Islamic state.

DAP national chairperson Lim Kit Siang said the new policy was a serious breach of the repeated ministerial assurance that Malaysian administration and lifestyle will not be affected by its 'Islamic state' declaration.

The veteran politician urged Prime Minister Dr Mahathir Mohamad who is also the finance minister to clarify the matter in Parliament.

"Mahathir should present a ministerial statement in Parliament, followed by a debate, on the new EPF policy," said Lim in a statement.

Last week, Deputy Finance Minister Chan Kong Choy told Parliament that the EPF will gradually give up its existing investments in companies dealing in liquor, gambling and cigarettes and that the fund will no longer invest in such companies.

The EPF board has also appointed consultants well-versed in Syariah law (Islamic law) as advisers on the fund's investment portfolios, added the deputy minister.

The EPF is a fund collecting monthly contribution from employers and employees for their benefits and welfare after retirement at the age of 55. The fund claims over 10 million contributors.

'Sinful businesses'

The new policy was announced after PAS Youth chief Mahfuz Omar disclosed in Parliament last week that EPF had invested in over RM600 million worth of shares in British American Tobacco (M) Bhd, Genting Bhd and Guinness Anchor Bhd this year.

Mahfuz criticised the government for investing in "haram" (sinful) businesses despite its claim that Malaysia was an Islamic state two months ago.

On Sept 29, Mahathir said Malaysia was an Islamic state because it was recognised by over 50 member countries in the Organisation of Islamic Conference.

This claim met with protests from both DAP and PAS who were once allies in the opposition front until the collaboration collapsed over "irreconcilable differences" concerning the issue of Islamic state.

PAS which is known to be dedicated to promoting an Islamic governance had maintained that the country was not an Islamic state as its highest law is the secular Federal Constitution and not Syariah law.

While DAP which has been vocal against the Islamic state urged the government to retract its declaration so as to preserve the constitutional provision that Islam is only for "ritual and ceremonial purposes" only.

'Make a stand'

Lim also expressed his disappointment with the deputy finance minister for "backing down" when questioned by Mahfuz.

"Instead of telling Mahfuz that Malaysia will maintain it status quo, Chan announced a new EPF policy that it would not make investments in haram businesses," he said.

Lim also called on MCA and Gerakan ministers to make a stand whether the declaration that Malaysia was an Islamic state should mean that EPF drop all its investments in gambling, tobacco and liquor stocks.

Citing a booklet published by the government last week on Islamic state, Lim said, "The assurances by them (the ministers) that nothing will change even if Malaysia is declared an Islamic state have been disproved by recent developments."

The 25-page booklet called Malaysia Adalah Sebuah Negara Islam (Malaysia is an Islamic state) was published by the information ministry.

"The booklet made disturbing and insensitive reference to non-Muslims, calling them disbelievers, kafir (infidels) and dhimmi (non-Muslims in an Islamic state) and even touched on the imposition of kharaj (land-tax on non-Muslims)," said Lim.