(Sept 15): PKR today said it was worried the RM20 billion injection into state equity investment firm ValueCap could be used to save companies linked to Umno and Barisan Nasional (BN) which have been affected by the economic slowdown.

Its secretary-general Rafizi Ramli said he feared ValueCap will be forced to raise huge bonds to cough up the RM20 billion, since according to its latest financial statement ended December 31, 2013, it only has RM3 billion in liquid assets.

Set up in 2002, ValueCap is owned by state investment arm Khazanah Nasional Berhad, fund management company Permodalan Nasional Berhad (PNB) and government pensions fund Kumpulan Wang Amanah Persaraan (KWAP).

"I am worried that the RM20 billion will eventually be used to buy undervalued shares. I am worried ValueCap will be directed to buy shares from companies which are deemed close to Umno and BN for the purpose of making short term profits for those with vested interests.

"If this happened, then public funds through Khazanah, PNB and KWAP have been used to bail out those with vested interest and close to Umno and BN," he told the press at the PKR headquarters today.

Prime Minister Datuk Seri Najib Razak yesterday announced that the RM20 billion pumped into ValueCap would shore up the stock market which had taken a beating, as the country is reeling from a political scandal.

Najib had said ValueCap will invest in undervalued Malaysian companies.

Rafizi also accused Najib of using public funds to cover up his administration's weaknesses, saying that if ValueCap is forced to raise the RM20 billion, it is akin to exposing Khazanah, PNB and KWAP to a debt risk of the same amount.

The Pandan MP said the weak sentiments against Bursa Malaysia's shares will not be resolved as long as problems surrounding Najib's brainchild 1Malaysia Development Berhad (1MDB), as well as the problems surrounding the prime minister's credibility, is not addressed quickly.

Finance ministry-owned 1MDB has accumulated RM42 billion in debts since it was set up six years ago, while Najib is under fire over the RM2.6 billion "donation", allegedly by an Arab donor, into his personal accounts ahead of the 13th general election in 2013.

"In the end, Khazanah, PNB and KWAP will be saddled with a RM20 billion debt and have ownership of shares which are valued lower than RM20 billion," said Rafizi. – The Malaysian Insider