EPF needs to have a say in mega banking merger: Shahril

KUALA LUMPUR: The Employees Provident Fund's (EPF) bid to include its vote in the proposed merger of CIMB Group Holdings Bhd, RHB Capital Bhd and Malaysia Building Society Bhd (MBSB) is fast stealing the limelight from the deal proper, which has another month or so before it reaches its initial three-month deadline for a plan to be formalised.
The EPF which has been vocal in its views on its right to vote on the proposed deal yesterday reiterated the importance of its vote, this time with its CEO Datuk Shahril Ridza Ridzuan saying that it is critical to the protection of the interest of its 14 million members.
"All we ask is for the companies to be mindful that EPF represents 14 million members and that our right to vote is critical to protect the financial interest of our members. As a major shareholder in both RHB and CIMB, we have the right to vote," Shahril told reporters on the sidelines of the EPF International Seminar 2014 here yesterday.
"From our point of view, we are basically disappointed because confidential discussion at the board level got released out. We have asked RHB Capital to take a look at it and take action on it. At this point in time, we are reserving any further comments," he added.
Shahril's response follows a statement issued by EPF last Friday to a business weekly, castigating members of the board of RHB Cap for leaking confidential information to the press.
Last Friday the business weekly reported that a document objecting to the submission by RHB Cap for an application of a waiver from the authorities for the EPF to vote in the merger was circulated among the board members of RHBCap,
According to a follow up report, the document was signed by one of the directors of the board.
EPF is the largest shareholder of RHBCap with a 41.43% stake. It also has a 65.02% stake in MBSB and 14.46% stake in CIMB.
Its shareholding in all three banks has raised the question of whether the deal is to be considered a related party transaction and therefore require it to abstain from casting its vote.
The notion however has been strongly argued against by EPF, with the fund stating time and again that it is not privy to negotiations and therefore should not be deprived of its right to vote.
The article in the business weekly in particular made the EPF see red and call for appropriate action be taken to investigate the matter of the leak and address the "gross misconduct" of the board members.
"We regret that the actions of these parties seemed to be designed to place the EPF in an unfavourable light and pre-emptively prevent an impartial discussion of the legitimate voting rights of a shareholder. This unique situation deserves close and careful consideration as any decision to the contrary would severely impede the EPF in carrying out its mandate to serve the Malaysian public at large," it said.