KUALA LUMPUR (May 18): Bank Negara Malaysia is seeking to pull out its sole representatives from the investment panel of two government agencies, the Social Security Organisation (Socso) and the Employees Provident Fund (EPF), revealed Deputy Finance Minister Datuk Chua Tee Yong.

The central bank's move comes after the government's tabling of a controversial proposed amendment to the Retirement Fund Act 2007 in Parliament recently, which will see the removal of Bank Negara's sole representative from Kumpulan Wang Persaraan Diperbadankan (KWAP), also known as the Retirement Fund Inc.

Chua clarified today that it was Bank Negara who had requested to be pulled out from KWAP to avoid a conflict of interest, due to the fact that it is a regulator and hence should not be involved in KWAP's investments.

"Bank Negara has [also] asked to pull out its representatives from Socso and the EPF," Deputy Finance Minister Datuk Chua Tee Yong said this in his winding up speech on the Retirement Fund (Amendment) Bill 2015 at Parliament today. 

It was previously reported that KWAP is managing a fund size of about RM112 billion.
 
Opposition members of Parliament Rafizi Ramli, Tony Pua and Wong Chen have all voiced concerns in their speeches in Parliament over the recent involvement of KWAP that had loaned RM4 billion to Finance Ministry-owned SRC International Sdn Bhd, which was used to purchase a stake in a mining company in Mongolia.

Earlier, during the same debate, Rafizi had disclosed that he was in possession of leaked Cabinet documents which confirmed that KWAP was one of the companies that would be jointly involved in the development of the Tun Razak Exchange (TRX) by the debt-ridden 1Malaysia Development Bhd (1MDB).

Meanwhile, Pua when met at Parliament lobby later, said the argument given by the Ministry of Finance (MoF) to avoid conflict interest is baseless.

"This is nonsense. Going by the same argument, MoF, which is also a regulator, has Treasury's secretary-general Tan Sri Irwan Serigar Abdullah holding the post of chairman in KWAP [so he shouldn't be there]," he said.

Pua said there may not be any immediate impact resulting from Bank Negara pulling out its representatives from the retirement funds, but warned that there would be "no check and balance" if something goes wrong.

MoF's revelation today sparked speculation among some opposition MPs that Bank Negara likely wants to "wash its hands" from being involved in dealings that are shrouded in controversies.