KUALA LUMPUR – February 22, 2016: Unlike what the opposition had been claiming, the Employees Provident Fund (EPF)’s investment with 1Malaysia Development Berhad (1MDB) was not as risky as it was touted to be.
In an interview with Malaysiakini, EPF chief executive officer Datuk Shahril Ridza Ridzuan said that the risks involved in the EPF-1MDB investments were “extremely low” in terms of exposure.
“If the people want, they can group that (1MDB’s acquisition of power plants back in 2012 and 2013) as exposure, but from our point of view, it is extremely low risk.
“It is no different from our exposure in other power plants, like Malakoff or the one once held by Tenaga Nasional Berhad (TNB),” Shahril explained.
In fact, he stressed that 1MDB’s cash flow was financed from sale proceeds and the government-owned strategic investment firm never missed payments and never once suffered a credit downgrade.
1MDB had raised a RM5 billion bond in 2009, where EPF took up a share of RM200 million, which is fully guaranteed by the government.
Shahril explanation regarding the nature of the EPF-1MDB investment was in response to a claim by PKR secretary-general Rafizi Ramli in October last year that EPF was making a risky investment with 1MDB.
Rafizi had deemed that the investment posed a high risk due to the high interest rates and the quantum of investment of RM1.72 billion.
Be that as it may, Shahril said that the circumstances would change when 1MDB sells off its energy assets to a foreign company as bond holders will not suffer and that this was no different from anywhere in the world.
“We are not particularly concerned about this either. From last year I always said, from EPF’s point of view, this is not a particularly big thing in term of credit exposure,” he emphasised.