KUALA LUMPUR (Oct 29): The Public Accounts Committee (PAC) will discuss in its next meeting if it is within its scope to discuss issues concerning the Employees Provident Fund's (EPF) involvement in the merger of CIMB Group Holdings Bhd (CIMB), Malaysia Building Society Bhd (MBSB) and RHB Capital Bhd (RHBCap).

"Anything in the AG (Auditor-General)'s report we will go through, it is not an issue. But if it is something which is not [in it] we have to discuss, if it is of interest or not," Nur Jazlan told reporters at Parliament today when asked on EPF's investments in all the three banks. The EPF holds a 41.5% stake in RHBCap, 14.6% in CIMB and 64.7% in MBSB.

Only after PAC meets on the matter will they decide if there is any need to call up EPF over the issue, said Nur Jazlan.

Recent news reports had indicated that an alternative could be on the table for EPF to dispose of its stake in CIMB to other government-linked companies so that its involvement in the merger would no longer be deemed a related party transaction (RPT), thus freeing it from the listing rule that prohibits it from voting in the tri-partite merger of CIMB, RHBCap and MBSB. 

This was regarded as an option for EPF, whose rule-waiver application to Bursa Malaysia to allow it to vote on the deal was rejected on Oct 21, despite arguing that the interests of its 14 million members were at stake.

Bursa's rejection was on the grounds that the EPF has (i) a stake in all three entities, (ii) has a controlling interest in both RHB Cap and MBSB, and (iii) had prior knowledge of the proposed merger.

Prior to that, The Edge Financial Daily had reported on Sept 30 that the Abu Dhabi government had written to Prime Minister Datuk Seri Najib Razak expressing concern over EPF voting in the merger.

Abu Dhabi's strategic investment arm, Aabar Investments PJSC, holds a 21.2% stake in RHBCap but will now hold 36% of the voting shares since the EPF cannot vote. 

Meanwhile, the PAC had tabled a report to Parliament earlier today on EPF's overseas investments. The report stated that EPF's overseas investments for domestic and international was in accordance to the Finance Ministry's guidelines.

The PAC began investigating EPF in April this year following queries over the retirement fund's escalating overseas investments. 

In the Auditor-General's report 2013, the AG had commended the EPF for surpassing last year's income target for its real estate and infrastructure investments in Malaysia and overseas. 

The EPF received an income of RM1.4 billion or 7.9% of the RM14.36 billion it invested in local and foreign properties and infrastructure last year. The income target for the year was RM930 million.

The provident fund invested RM6.46 billion of the RM14.36 billion in foreign real estate properties and infrastructure, while another RM4.92 billion was invested locally. It also invested RM2.98 billion in infrastructure last year.