EPF's move on RHB not a bailout

KUALA LUMPUR (April 3, 2007): The Employees Provident Fund's (EPF) acquisition of RHB Bank is not a bailout, says Second Finance Minister Tan Sri Nor Mohamed Yakcop.
He said the purchase of 32.8% of the remaining RHB shares from Utama Banking Group "is purely a commercial transaction".
"The question of bailout does not arise. It is purely a commercial transaction," he told Opposition Leader Lim Kit Siang (DAP- Ipoh Timur).
"Believe me Yang Berhormat there is no bailout," he added.
In his winding-up speech on the Motion of Thanks on the Royal Address in Parliament today, Nor Mohamed said the acquisition was EPF's long-term strategic measure as well as the need to protect the rights and interests of EPF contributors.
Nor Mohamed said the market price for the shares was RM6.50 per share but the other party was only willing to pay RM4.80 per share.
"Is it so easy to sell it at RM4.80? We should criticise them (EPF) if they allowed the shares to be sold at the lower price," he said, adding that EPF already owned 30% of the shares prior to the deal.
"It is a decision which should be praised instead of being criticised," he said on the RM10 billion deal which has raised much criticism.
"EPF has also stressed that it would not interfere in the running of RHB," he added.
On investments in the country, Nor Mohamed said domestically sourced funds contributed RM25.7 billion of direct investments last year while foreign direct investments (FDIs) contributed RM20.2 billion.
"The advantage of sourcing domestically is funding from local banks are used and this creates downstream investment industries," said the minister.
On credit cards, Nor Mohamed said bad debts were not at a worrisome level despite an increase in the number of cards issued.
"The non-performing loans (on credit cards) is under control. In fact, it has come down to 3.7%. It was a high at 16% during the financial crisis (in 1997)," he said.

tunku : it's definitely not a bailout kit siang, every time some transaction this kit siang would say a bailout, setup a royal commission bla bla bla.