EPF lambasts leak of document within RHBCap’s board, calls for investigations

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KUALA LUMPUR (Sept 5): The Employees Provident Fund (EPF) has issued a strongly-worded statement over the leak of a document that was circulated within the board of RHB Capital Bhd (RHBCap), in which it is a major shareholder.

The Edge Financial Daily had reported today that the said document was endorsed by a board member of RHBCap and detailed the objection against allowing EPF to vote in the merger between RHBCap and CIMB Group Holdings Bhd.

EPF is the major shareholder of RHBCap and is also a substantial shareholder of CIMB Group.

Refering to The Edge Financial Daily’s report, the retirement fund has described the actions of “certain parties” [for divulging such information to the media] as a “gross misconduct” and a “clear breach of trust and professional duty.” It has also asked for investigations to be conducted on the matter.

EPF said the move to divulge such information is a pre-emptive attempt to prevent an impartial discussion on the legitimate voting rights of a shareholder.

“We find it shocking that certain parties have unscrupulously distributed confidential correspondence and discussions at board level to members of the media,” the statement read.

“Their actions are unacceptable under Malaysian law and market practice and a clear breach of trust and professional duty.

“The EPF has requested that appropriate action be taken to investigate this matter and address this gross misconduct,” the statement added.

The Edge Financial Daily had reported that an email document has been circulated among directors at RHBCap, urging RHBCap directors to object to the bank’s submission of an application to Bursa Malaysia for a waiver that will allow EPF to vote in the deal.

Among the reasons sighted in the email were that it was “inconceivable” that EPF had not been engaged in prior discussions relating to the proposed merger.

The document also said that EPF should apply for the waiver itself, rather than RHBCap, and that the transaction should be administered under the major disposal rules in Chapter 10 of Bursa’s listing requirements.

This would entail a higher approval threshold of 75% votes at the extraordinary general meeting compared to the current proposed structure, which requires only 50% plus one share approval threshold.

In response, the EPF reiterated that it has not been part of any discussions on the details of the proposed merger.

“In this instance, the EPF has merely asked the RHB board to consider our unique position as the guardian of the rights and savings of 14 million working Malaysians who deserve a voice in determining the future of their investments,” the statement read.

“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,” the statement added.