EPF to ensure investee firms are up to mark
> We will not hesitate to reduce our exposure by selling our stake in problem-ridden companies: Outgoing CEO
KUALA LUMPUR: In view of the changes corporate Malaysia has seen recently in terms of leadership and heads rolling due to corruption charges – the Employees Provident Fund (EPF) said it will ensure that the companies it invests in is up to the mark in terms of integrity and governance.
Outgoing CEO Datuk Shahril Ridza Ridzuan said based on its past actions, the EPF has not been one to hesitate to reduce its exposure in companies it has invested in.
He added that as a shareholder, the fund engages constructively with problem-ridden companies it has invested in, at all times, as part of its mandate of improving corporate governance in Malaysia as a whole – before taking action such as reducing exposure by selling its stake.
In saying that changes are normal and expected especially with the change of the government, the fund’s chairman Tan Sri Samsudin Osman said that the EPF maintains its standard of integrity and would only hope to deal with those with a similar standard of governance.
“We have a high standard of integrity and we hope to deal with people like that too. We will be the first to notice if things are not right because we invest in a lot these companies. If we feel that things are not right, we tell them. We have done this in the past. We will make sure whoever we deal with and our investee companies are up to mark in terms of integrity and governance – which is all to fulfil our needs to have good governance ourselves and we impose certain values in our investee companies,” he said at a press conference at the International Social Security Conference 2018 yesterday.
Samsudin added that EPF does frequent company visits and communicate with the relevant companies when anything is amiss.
As at end 2017, the EPF has invested in 192 small and medium-cap companies. The equities portfolio remains the largest contributor to the retirement fund’s income, which recorded an 8% increase from RM309.48 billion in 2016 to RM334.23 billion as at end December 2017.
On another note, EPF also dispelled news reports on a proposed merger between the fund and the Social Security Organisation (Socso), saying that it has not received any indication nor did it receive any official communication on the matter.
“To be honest, we haven’t gotten anything apart from what we have read in the press. So far, there has been no official communication as far as we are concerned. We have not gotten any indication from our own bosses,” said Samsudin.
The two entities are governed by two separate ministries; the EPF is under the purview of the Finance Ministry while Socso falls under the Human Resources Ministry.
Human Resources Minister M. Kulasegaran was quoted by a local business daily last month, that the ministry is preparing a Cabinet paper on whether the two can be merged into a single entity and operate under one roof.