AS the Malaysian Anti-Corruption Commission (MACC) commenced its investigation into the RM200 mil losses incurred by the Retirement Fund Inc (KWAP) in its eFishery investment, Madani lawmaker Hassan Abdul Karim has led the clarion call for the head of the Finance Minister to roll as a mark of responsibility.
In the principle of accountability and responsibility, the PKR’s Pasir Gudang MP wants Prime Minister Datuk Seri Anwar Ibrahim who also holds that vital portfolio “to set a good example by making a bold decision to resign as Finance Minister with immediate effect”.
“The board of directors, investment panel and the highest KWAP management have committed great negligence in control and governance to the extent that the fund was defrauded of RM200 mil by the Indonesian aquaculture start-up,” the 75-year-old lawyer by training lamented in a recent media statement.
This negligence scandal in KWAP which is entrusted by the state to look after the retirement funds of civil servants is an offence that can’t be taken lightly.
Not having had enough to learn from the SRC International scandal, the board of directors, investment panel and the highest KWAP management who are entrusted by the state have committed the same mistakes.
Therefore, I call on PMX to investigate forensically and if it’s found that there is a fiduciary error, negligence and conflict with the principles of responsibility and accountability, dismissal action must be initiated.
Lax due diligence
Recall that PMX had revealed that KWAP was duped nearly RM200 mil in eFishery as a result of a “pre-meditated fraud” by the Indonesian agritech start-up.
The swindle came in the form of the start-up’s management manipulation of financial reports which other international institutional investors also fell victim to, notably Temasek, SoftBank, 42XFund and Northstar.
“The decision went through the evaluation and governance process based on the information available at the time which included verification of financial statements by internationally recognised certified auditors,” PMX pointed out in a written parliamentary reply on Wednesday (July 15).
“At the same time, the consortium of investors, including KWAP, also carried out independent due diligence to ensure that all information was complete and valid for investment consideration.”
He added that KWAP and the consortium of investors have initiated legal action and efforts to recover their funds.
PKR’s Subang MP Wong Chen had earlier raised accountability measures that have been or would be taken against KWAP’s board, investment panel and senior management over the approval and oversight of their investment.
Aside from Hassan, Melaka Pejuang head Sheikh Ikhzan Sheikh Salleh took a swipe at PMX for having just brushed off the almost RM200 mil loss as “KWAP was deceived”.
“Haven’t Madani backers always hailed PMX as “Asia’s Best Finance Minister”? With such extensive experience and a team of professionals surrounding the country’s financial institutions, how could an investment of this size end up with the excuse that they were deceived?” he hit out on his Facebook page.
Before investing hundreds of millions of ringgit, wouldn’t there be a due diligence process? There would be account reviews, risk assessments, audits, financial reports, presentations to committees and approvals from various parties.
All of this was created so that trust funds don’t invest recklessly. So, where exactly did the system fail?
Ironically, if ordinary citizens lost RM2,000 due to a scam, all sorts of advice would be proffered. “Why didn’t you check first?” “Why is it so easy to believe?” “Didn’t you do your research?”
But when almost RM200 mil was lost, the only excuse that came up was, “We were cheated. too.” Suddenly the sentence that is always used to blame scam victims became the excuse that the rakyat were asked to accept.
Finfluencer Nurhisyam Mazlan also took a pot shot at PMX with this remark: “If it happened to you, it’s called an investment failure. If someone else does it, it’s frowned upon as plundering (the nation’s wealth).”
“When investing in private equity markets that are not strictly regulated like the stock exchange, 100% reliance on management reports and annual audits provided by the company is a fatal governance weakness,” warned the dual-licensed remisier at Affin Investment Bank Bhd.
It’s time for the investment policy of the rakyat’s retirement funds to be tightened, limiting exposure to high-risk overseas venture capital markets.
Imagine if this were to happen in the days of KWAP’s former glory, there would almost certainly be a huge crowd rolling in the streets demanding the resignation of the PM and the Finance Minister. – Focus Malaysia
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