BID TO HIDE KWAP'S MISSING RM4 BIL?Changes to Retirement Fund Act can create 5 more 1MDBs, warns Rafizi

The government's proposed amendments to the Retirement Fund Act would allow more risky and questionable investments of the pension fund, PKR MP Rafizi Ramli said today, adding that this would pave the way for more financial scandals similar to 1Malaysia Development Berhad (1MDB).

‎He said the proposed amendments included removing Bank Negara Malaysia's representatives from the Retirement Fund Incorporated (KWAP) investment board and allowing the Finance Ministry to appoint four representatives.

"The intention of the draft bill is clear: to remove the scrutiny of the central bank's representatives f‎rom KWAP, in order to allow more risky and questionable investments of pension fund in the future," the Pandan MP told a press conference at the Parliament lobby today.

"This bill shouldn't be tabled at all. The amendments are meant to make KWAP's investments cloudier and remove check and balance."

Rafizi

Another proposed amendment would see KWAP's scope of investment widened to include infrastructural development‎ and natural resources as well as "any interest therein".

Rafizi said this was clearly a pre-emptive strike to ensure that KWAP's decision to invest in overseas companies ‎would not be challenged in court.

"These amendments in my opinion are clearly aimed at protecting its questionable investments in the past, including a RM4 billion loan to 1MDB subsidiary SRC International Sdn Bhd.

"I also suspect the amendments are made as preparation in case legal action is taken against KWAP in relation to its loan to SRC International.”

He said the bill was tabled for its first reading yesterday, and would likely be debated and passed by Parliament within the next few days.

Last week, the PKR secretary-general said that SRC International had recorded an investment impairment of RM115 million drawing concerns on its ability to pay back the RM4 billion loan from KWAP.

He said that the declining value of SRC's assets also brought into question the authenticity of its investments, adding that the impairment could even be higher as there was no information on some RM3.1 billion of its investments.

Prior to that, Rafizi had revealed that SRC had invested some RM3.81 billion of the RM4 billion borrowed from KWAP in "open-ended" funds that cannot be identified or classified.

He said this was similar to the investments made by 1MDB, adding that out of that amount, some RM3.1 billion has been put into funds that cannot be traced by auditors of SRC's finances.

Rafizi had urged Najib to order SRC to return the RM4 billion it borrowed from KWAP to protect the interests of civil servants.

He said that SRC, a company that was "de-merged" from 1MDB three years ago, had made losses of RM164 million without any gains, according to its latest financial statement.

He added that SRC's situation was akin to the modus operandi of other organisations that were linked with 1MDB, which was to borrow huge amount of funds with a guarantee from the government without stable business activities.

1MDB has come under fire from Rafizi and other opposition politicians as well as former prime minister Tun Dr Mahathir Mohamad over the fund's heavy debts, its use of money and its opaque operations.

There were concerns over the firm’s debts estimated at some RM42 billion, just five years into its operations, amid softening of the ringgit against the US dollar. – TMI