Where’s the report on probe into GLC from 2018, C4 asks MACC

Related News: https://www.freemalaysiatoday.com/category/nation/2022/08/05/wheres-the-report-on-probe-into-glc-from-2018-c4-asks-macc/

Coverage by: Free Malaysia Today

PETALING JAYA: The Center to Combat Corruption & Cronyism (C4) has demanded that the Malaysian Anti-Corruption Commission (MACC) provide updates on its investigation into a government-linked company called Pembinaan PFI Sdn Bhd.

Pembinaan PFI Sdn Bhd is a GLC that was reportedly created to implement private finance initiatives (PFI).

PFIs are a form of public-private partnership where public projects are financed by private sector concessionaires who then get repaid over the concession period.

Speaking at the launch of C4’s report on PFI, economist Edmund Terence Gomez said MACC began investigating the company in 2018 following an interview with Bangi MP Ong Kian Ming but there have been no updates since.

Edmund Terence Gomez.

“Four years on, MACC hasn’t released any information on its investigation into Pembinaan PFI Sdn Bhd,” Gomez said, adding that this suggested MACC’s officers had limited ability to investigate complex cases.

He said that all PFI policies were supposed to be solely managed and implemented by the Public-Private Partnership Unit, an agency under the prime minister’s department.

Pushpan Murugiah, an investigative researcher with C4, said that in order to fund its PFI projects, Pembinaan PFI Sdn Bhd had obtained loans amounting to RM30 billion from the Employees Provident Fund and Kumpulan Wang Persaraan (KWAP).

“However, the money loaned did not go to them. It was parked in a trust fund,” Pushpan said, adding that the company had no control over the money loaned from the pension funds.

Pushpan Murugiah.

He said Pembinaan PFI Sdn Bhd was a shell company, with no operational staff, and was solely operated by its directors.

He said the collateral for the loans was government land parcels leased to Pembinaan PFI Sdn Bhd by the federal lands commissioner.

With no income, he said, Pembinaan PFI then sub-leased the same plots of land back to the federal lands commissioner for a sum of RM29 billion to repay the loan from EPF.

Gomez claimed that when C4 met with EPF, the pension fund insisted that it had the power to grant a loan RM26.037 billion to Pembinaan PFI and that it was receiving a 4% interest rate on the loan.

In its report, C4 stated that funds raised by Pembinaan PFI were loaned in two tranches.  The first loan agreement (PFI 1) in 2007 was for a sum of RM20 billion from EPF, while the second (PFI 2) in 2012 was for RM6.037 billion from EPF and RM3.963 billion from KWAP.

“Isn’t a 4% return on over RM25 billion low? It could have been invested elsewhere for much higher returns,” Gomez said, adding that this approach would have benefited EPF’s contributors.

“So is EPF independent and accountable in the way they use the money? They insist they are, but I have to question that.”

FMT has reached out to EPF for comment.

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