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I Got Tear Gassed

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Najib The Ponzi Scheme Master

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SJPP - EPF To Foot Loan Defaults

Posted by Simon Templar On Tuesday, July 28, 2009

Last Friday, I wrote an article titled '
SJPP; Another PKFZ In The Making' in which I belief that the taxpayers may have to eventually foot the bills of loan defaulters for loans guaranteed by SJPP. That may end up being a massive RM10 billion.

And today, Malaysian Insider posted on their site the following from Reuters:

EPF To Loan RM5bn to Prokhas

KUALA LUMPUR, July 28 — A government agency which is administrating two schemes under the first economic stimulus package is in talks with the employees’ pension fund for a RM5 billion, a business daily said.

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

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * *


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.

But that is nothing shocking in Malaysia. We are so used to it by now.

What intrigues me is - isn't the guarantee scheme a guarantee? If it is a guarantee, wouldn't payment need to be made to the bank if and only if the bank has exhausted all means to recover the loan from the company who took the loan? Why is there a need for cash now?

The article said that EPF is ready to 'fund the loan'. What loan? Aren't the banks the ones who are giving out the loans while SJPP stands as 80% guarantor? I don't understand. Or is it that the banks are not willing to extend the loans (and bear the 20% exposed risk) and as such the government is pumping the money into the banks only to be disbursed i.e. disguised as loans by the banks when in actual thruth it is EPF who loans the money to the distressed 'eligible' companies? Is someone trying to mask something here? This is fishy. RM5,000,000,000 of EPF money is at stake. A lot of rakyat's savings is going down the drain.

And the balance of another RM5,000,000,000 will be funded via government bonds, private debt securities or a term loan. Hey this strengtens my above suspicions even further? Why need the entire RM10,000,000,000 ready in cold hard cash. SJPP is supposed to be a guarantor only. Are they that sceptical that the loanees will not even repay a single sen?

Oi! Nothing seems to jive here. What is happening?

Is this a RM10 billion handout?

Fucking hell! Someone better come clean on this. These are the 3 directors of Prokhas Sdn. Bhd. (taken from SJPP's website). And they should know the truth.

1. Y. Bhg. Dato' Puteh Rukiah Abdul Majid, Deputy Secretary General (System and Control) Ministry of Finance

2. Y. Bhg. Datuk Latifah Datuk Abu Mansor, Deputy Secretary General (Policy) Ministry of Finance

3. En. Fazlur Rahman Ebrahim, Managing Director of Prokhas Sdn. Bhd.

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