14.5m contributors may lose out if EPF sells PLUS

KUALA LUMPUR: There is rising concern that some 14.5 million contributors to the Employees Provident Fund (EPF) may lose out on a steady stream of dividend income if the pension fund sells its 49% stake in highway operator, PLUS Malaysia Bhd.

These concerns seem to be gaining momentum amid news reports that entrepreneur Tan Sri Abu Sahid Mohamad is eyeing to take over PLUS Malaysia through his flagship Maju Holdings Sdn Bhd.

Besides EPF's 49% equity in PLUS Malaysia, the majority 51% shareholding is held by UEM Group Bhd, which is a wholly-owned subsidiary of Khazanah Nasional Bhd.

Analysts say the proposal should be rejected as both the pension fund and the government's investment arm have enjoyed good returns from their acquisition of PLUS Malaysia since end-2011.

They also said PLUS Malaysia represents a core business for Khazanah and a core investment for EPF and was undoubtedly an important income generator for both.

As such, it raises the inevitable question as to why the fund or Khazanah would want to sell the highway operator at all.

If the sale goes through, contributors feel that EPF would have lost its valuable income from toll collection and, as a result, will stop paying good dividends to contributors.

The other question being raised is why sell a national asset to a private party when it belongs to the people via its ownership through a government-linked company (UEM Group) and EPF.

The investment has been benefiting Malaysians including those from Sabah and Sarawak, hence PLUS Malaysia should continue to remain in EPF's portfolio as a long-term strategic investment, the analysts said.

And, when the dividends are paid to Khazanah, it flows back to the government which can then use it for infrastructure development.

Analysts note that given the strategic nature of the assets, it is important for Khazanah and EPF to remain the custodians of this business as they represent both the government and the people.

It was good to note EPF Chief Executive Officer Datuk Shahril Ridza Ridzuan as saying last month that the EPF has no plan to dispose of its 49% stake in PLUS Malaysia "as the investment in the company was reaping good returns for the pension fund."

Bernama quoted him as saying that the fund and UEM Group had invested substantially in expanding its network, especially in the Klang Valley.

He was also quoted as saying that "PLUS Malaysia has contributed substantially to EPF's earnings."

UEM Group, after receiving a non-binding letter of intent from Maju Holdings, also said it has no intention to sell its stake in PLUS Malaysia. — Bernama