EPF ensures integrity in PLCs
StarBiz, 8th November 2005
THE investing public can expect to be able to count on the Employees Provident Fund (EPF) to safeguard their common interests in corporate governance in public-listed companies (PLCs). The EPF will ensure that corporate governance will be maintained at a high level, or improved, in the PLCs where it is represented on their boards or where it owns substantial stakes.
In earlier years, the EPF was not represented on the boards of listed companies but it is increasingly seeking such representation and ensuring its voice is heard in the boardrooms. “In the past, we acted purely like portfolio managers where we buy and sell the shares.'' Dr. Roslan A. Ghaffar told StarBiz in Kuala Lumpur.
Presently, EPF is represented on the boards of 16 listed companies in which it has substantial shareholdings.
EPF owns stocks in more than 390 companies listed on Bursa Malaysia. EPF will not seek board seats in all the listed companies where it is a substantial shareholder. It does not have that many senior personnel to occupy all such positions.
There is a department in EPF that tracks developments in the companies that it has invested in. “For example, a company wants to buy an asset. That department will look into the valuation – is it over-priced, especially if it is a related-party transaction,” Roslan said.
Is this step, a step in the right direction?
Does EPF have the competence to track a companies business portfolio and efficiencies?
Most likely, what EPF representative can do is to keep track of the P & L, the Return on Investment (ROI) and the yields. But this information comes too late as by then the companies would have incurred hundreds of millions of losses (example: RHB Bhd & MBSB).
Representation in the board to safeguard the contributors common interests in public-listed companies would mean that EPF must appoint those who have the competence in the subject business, have the capability, knowledge and skills of the business, and are able to foresee the business directions, analyse investments and potentials, and most of all, understand the risks associated with the business structures. Does EPF have those competent personnels to do the job efficiently and effectively or would EPF be willing to engage experts to represent them?
How would EPF monitor their representative who sits on the Board? How would EPF hold them accountable for the results?
EPF have to answer all these questions before they shout loud and boast to ask the contributors to count on them.
Harap Pagar, Pagar makan Padi.
StarBiz, 8th November 2005
THE investing public can expect to be able to count on the Employees Provident Fund (EPF) to safeguard their common interests in corporate governance in public-listed companies (PLCs). The EPF will ensure that corporate governance will be maintained at a high level, or improved, in the PLCs where it is represented on their boards or where it owns substantial stakes.
In earlier years, the EPF was not represented on the boards of listed companies but it is increasingly seeking such representation and ensuring its voice is heard in the boardrooms. “In the past, we acted purely like portfolio managers where we buy and sell the shares.'' Dr. Roslan A. Ghaffar told StarBiz in Kuala Lumpur.
Presently, EPF is represented on the boards of 16 listed companies in which it has substantial shareholdings.
EPF owns stocks in more than 390 companies listed on Bursa Malaysia. EPF will not seek board seats in all the listed companies where it is a substantial shareholder. It does not have that many senior personnel to occupy all such positions.
There is a department in EPF that tracks developments in the companies that it has invested in. “For example, a company wants to buy an asset. That department will look into the valuation – is it over-priced, especially if it is a related-party transaction,” Roslan said.
Is this step, a step in the right direction?
Does EPF have the competence to track a companies business portfolio and efficiencies?
Most likely, what EPF representative can do is to keep track of the P & L, the Return on Investment (ROI) and the yields. But this information comes too late as by then the companies would have incurred hundreds of millions of losses (example: RHB Bhd & MBSB).
Representation in the board to safeguard the contributors common interests in public-listed companies would mean that EPF must appoint those who have the competence in the subject business, have the capability, knowledge and skills of the business, and are able to foresee the business directions, analyse investments and potentials, and most of all, understand the risks associated with the business structures. Does EPF have those competent personnels to do the job efficiently and effectively or would EPF be willing to engage experts to represent them?
How would EPF monitor their representative who sits on the Board? How would EPF hold them accountable for the results?
EPF have to answer all these questions before they shout loud and boast to ask the contributors to count on them.
Harap Pagar, Pagar makan Padi.
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