The Malaysian Reserve, citing an unidentifed source today, said the Employees’ Provident Fund (EPF) was ready to fund the loan at an undisclosed rate to Prokhas, the government-owned special purpose vehicle.

The source added that Prokhas was also looking at other financing options including government bonds, private debt securities or a term loan that may give more competitive rates.

Malaysia announced its first stimulus package of RM60 billion in March to shore up the export-reliant economy against the global economic crisis.

Prokhas manages two schemes under the package and was allocated 5 billion ringgit each, known as Working Capital Guarantee Scheme and the Industry Restructuring Loan Scheme, which is under the Ministry of Finance.

EPF’s talks with Prokhas may draw some criticism, as loans to government agencies and corporations have in the past been called bailouts for poorly performing local companies by critics and the resurgent opposition.

In 2008, the government said it would transfer RM5 billion from the EPF to state owned fundmanager Valuecap to be invested in undervalued Malaysian stocks. — Reuters

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Note:

Extracted from The Star (24 July 2009)

"... SJPP is managed by Prokhas Sdn Bhd and both are wholly-owned units of the Minister of Finance Inc."

At one read, this looks like a usual business deal for EPF. But let's digest this news a little.

First, EPF is being used as the source of fund again. Whenever the government needs money to bail out anyone, it is always EPF who forks out the money. I am not sure if preferential interest rate is charged - I hope not. But again, the government is using our money as though it is theirs. This BN government has never stop squanderring our tax money and EPF savings, and there is no end in sight.