DANAVEST

By Shannon Teoh, The Malaysian Insider

KUALA LUMPUR, Nov 4 - Finance Minister Datuk Seri Najib Razak defended the RM5 billion injection into ValueCap via a loan from the Employees Provident Fund (EPF) despite an outstanding RM5.1 billion debt, saying that the company has performed well so far.

“The shareholders are happy and have gotten returns. They will decide what is the best way to handle it,” he said referring to the sum owed in interest-bearing unsecured bonds.

The Malaysian Insider had yesterday broken the news that ValueCap still owed the sum which were due to mature in February 2006 but was then extended to February 2009.

The debt was incurred in March 2003 when ValueCap borrowed the amount from shareholders Khazanah Nasional, Kumpulan Wang Amanah Pencen and Permodalan Nasional Bhd to invest in the stock market.

The DAP had today called for Najib to withdraw the RM5 billion loan from EPF, calling it a zero-impact move as the RM5 billion EPF injection would be used to pay off the debt.

In a press conference after winding up the Budget debate, Najib, who is also Deputy Prime Minister, said there was no problem with using EPF funds as it was guaranteed by the government and, furthermore, ValueCap had performed well with a stock portfolio that had appreciated in value.

He also said that the opposition were being irresponsible by walking out in the middle of his winding-up speech.

“I intended to give a clear picture first and then I would be willing to give any clarification,” he said, defending his move not to allow any requests for clarification until he had completed his speech.

“The people must be aware that the opposition has abandoned its responsibility to be a constructive opposition.” he added.

Najib also asserted that it was not a new budget as claimed by the opposition.

“The expenditure remains the same. Only some amendments were made due to savings from fuel subsidies which have been reduced from RM21 billion to around RM10 billion,” he said, referring to the RM7 billion stimulus package he announced.

He further refuted claims by the opposition that he was lying when he called Pakatan Rakyat’s alternative budget a contractionary budget.

“They suggest an operating expenditure of RM130 billion when ours is RM154 billion,” he said.

“I have the figures,” he quipped, adding that these figures have not been repudiated.

Najib also stated that the budget was based on oil prices of US$70 per barrel and the government would try to control changes in deficit should the price of oil fluctuate in the future.

He added that developments to such areas as Cochrane and Ampang Hilir would bring “income of several billion” to the government but it depended on what sort of development concept was pursued.

Answering a question on the RM1.67 billion Eurocopter deal, he said that the postponement has already been announced and that the price may be higher if the government did not seal the purchase soon as the tender price expires in February 2009.